We now have the worst of both worlds —not just inflation on the one side or stagnation on the other, but both of them together. We have a sort of "stagflation" situation and history in modern terms is indeed being made. There is another point behind the figures. As I say, production has fallen by 1 per cent. or ½per cent.

Since no one had the solutions to stagflation, Carter, a fiscal conservative from the beginning, was thrown back to his personal bias and chose to elevate inflation to the nation's most pressing problem.

Moving into the mid-1970s, America's economic performance suffered. Stagflation—inflation combined with minimal economic growth—eroded wages and profits, weakening business and consumer confidence.

The UK economy is suffering a nasty bout of stagflation and the prospects appear poor. That is the conclusion financial markets drew this week from yet more disappointing data, highlighting the weakness of the post-Covid economy and the persistence of high inflation.

Stagflation

Meaning

Noun

Origin

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