Inflationary pressures refers to the demand and supply-side pressures that can cause a rise in the general price level. Demand-pull inflationary pressure is greatest when actual GDP exceeds potential GDP causing a positive output gap. Cost-push inflationary pressure can arise from increases in unit wage costs, rising import prices and an increase in the prices of raw materials, fuel and components used in production.
Cost push inflationary pressures
Input prices for UK manufacturers
Unit labour cost inflation for the UK
UK Output Gap
(Difference between actual and potential GDP, expressed as a % of potential GDP)
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