Did inflation cause the cost of living crisis?

About this episode

The episode discusses the causes of inflation and its impact on the cost of living crisis.

Inflation has fallen a long way from its peak - but many people still feel worse off, and price rises have remained stubbornly above the Bank of England’s 2% target. So what actually caused the big inflation spike, how close are we to “normal”, and what does that mean for households?   Helen is joined by David Miles (OBR and former member of the Bank of England’s Monetary Policy Committee) and Peter Levell (IFS) to break down the basics: what inflation is, why central banks target 2% rather than 0%, and what drove prices up so sharply in recent years.   We also dig into who inflation hits hardest, how much of the cost-of-living crisis is really about inflation, and why the Bank raises interest rates even though it can make life feel tougher in the short run.  Become a member: https://ifs.org.uk/individual-membership Find out more: https://ifs.org.uk/podcasts-explainers-and-calculators/podcasts Hosted on Acast. See acast.com/privacy for more information.

People in this episode

Host: Helen

Guests: David Miles, Peter Levell

Topics covered

• inflation
• cost of living crisis
• central banks
• interest rates
• economic policy

Keywords

• inflation
• cost of living
• Bank of England
• interest rates
• economic crisis

Mentioned in this episode

Organizations: Bank of England, Institute for Fiscal Studies, OBR

More episodes of IFS Zooms In: The Economy

• Inequality: what does Britain really think? · June 11, 2026 · 48 min
• How unequal is Britain? · June 4, 2026 · 48 min
• The tough fiscal reality facing the UK government · May 28, 2026 · 47 min
• Why is UK electricity so expensive? · May 21, 2026 · 50 min
• What do councils actually do? · May 14, 2026 · 42 min
• The tough choices facing Wales’s next government · April 15, 2026 · 45 min