What is Inflation: : How it Works & How to Beat it - Money and Investing with Andrew Baxter

Since Covid, inflation has been the centre of attention in the finance world. We hear about the numbers on the news or in the data reports, but what do they really mean? Join us this week as we try to clear up some of the mysteries around inflation: In basic terms there are two main types of inflation that we can see manifest in the real world. Host Andrew Baxter is an economist by qualification and explains that the two main types of inflation we see are either demand-pull or cost-push. Demand-pull entails when a substantial increase in the demand for something from consumers comes along while supply remains the same, inevitably, this leads to a price increase which in real terms is tantamount to inflation. Cost-push is the other driver we can see which is driven more by producers than consumers. When producers are paying more to produce something, they will often increase the price in order to cover the added costs of production. As you can see, both instances result in the price moving higher. Cost-push can be caused by a lot of things and a common one is the price of oil. Anything that needs to be transported around requires energy and prices for that generally stem from oil prices. As such, if oil prices are higher and fuel is more expensive, you can see producers passing these costs on to consumers.