Oil prices plummeted at the start of the pandemic, but demand has since rocketed back to a seven-year high.

Gasoline costs an average of $3.31 per gallon in the United States, up from $2.39 per gallon a year ago. It’s a similar story in the United Kingdom and the European Union. 

Gas prices have also risen, leaving people all over the world with eye-watering central heating bills. 

Prices have risen due to increased demand from Asia, as well as a cold winter in Europe last year, which depleted gas reserves. 

Consumers who were unable to go out to restaurants or on vacation due to the lockdown last year spent their money on household goods and home improvements.

Manufacturers in Asia, for example, have struggled to keep up with demand since then, with many forced to close due to Covid restrictions. 

It has resulted in material shortages such as plastic, concrete, and steel, driving up prices. Timber costs up to 80% more than usual in the UK in 2021, and it costs more than twice as much in the US. 

Because of higher supply chain costs, major US retailers Nike and Costco have raised their prices. 

Furthermore, microchips, which are critical components in automobiles, computers, and other household goods, are in short supply. 

Global shipping companies, which transport goods around the world, have been overwhelmed by the pandemic’s surge in demand.

As a result, retailers have had to pay significantly more to get those goods into their stores. As a result, prices have risen for consumers. 

A single 40ft container from Asia to Europe now costs $17,000 (£12,480), which is ten times more than the previous year’s cost of $1,500 (£1,101). 

It has been accompanied by an increase in air freight fees, which has been exacerbated by a lorry driver shortage in Europe. 

In December, transportation bottlenecks appeared to be easing, with the United States beginning to address record port congestion. 

However, Omicron and the emergence of future Covid variants have the potential to reverse these gains. 

During the pandemic, many people quit or changed jobs.

According to the US Department of Labor, more than four million people quit their jobs in April, the highest number on record. 

As a result, businesses are having difficulty recruiting employees such as drivers, food processors, and restaurant waiters. 

According to a survey of 50 major US retailers, 94% are having difficulty filling open positions. 

As a result, companies are having to raise wages or offer signing bonuses in order to attract and retain employees. McDonald’s and Amazon are both offering $200 to $1,000 in hiring bonuses. 

Those additional employer costs are being passed on to consumers once again. Next, a global clothing company, has blamed planned price increases for 2022 in part on rising wage costs.

Hurricanes Ida and Nicholas wreaked havoc on global oil supplies as they passed through the Gulf of Mexico, damaging US oil infrastructure. 

And problems meeting demand for microchips were exacerbated last year when a severe winter storm shut down major factories in Texas. 

Coffee prices have also risen as a result of a poor harvest in Brazil, the world’s largest producer, following the country’s worst drought in nearly a century. 

Imports that are more expensive are also contributing to price increases. New post-Brexit trade rules are expected to reduce EU imports to the UK by about a quarter in the first half of 2021.

Many British tourists visiting Europe this year will face roaming charges. 

Separately, almost all US import tariffs on Chinese goods have been passed on to US customers in the form of higher prices. 

Last year, Chinese telecoms giant Huawei stated that US sanctions imposed on the company in 2019 were affecting US suppliers and global customers. 

During the pandemic, governments around the world increased their spending and borrowing. As a result, tax increases have contributed to the cost-of-living squeeze, while most people’s wages have remained stagnant. 

Many developed economies have policies to protect workers, such as furlough, as well as welfare policies to protect the poorest.

Some economists believe that as the support measures expire, these policies will raise inflation.

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