Inflation in the OECD area continues to surge to 5.8 % in November 2021, the highest rate in 25 years

Inflation in the OECD area surged to 5.8% in the 12 months to November 2021, compared with 5.2 % in October, and just 1.2 % in November 2020, reaching the highest rate since May 1996. The rise was particularly marked in the United States, where year-on-year inflation climbed from 6.2 % in October to 6.8 % in November, the highest rate since June 1982. [1] In the Euro Area, inflation also increased strongly to 4.9 % in November, from 4.1 % in October and minus 0.3 % a year earlier, although it remained lower than in the OECD area as a whole.

Energy prices soared by 27.7 % in the OECD area in the year to November, more than three percentage points (p.p.) higher than in October (24.3 %) and the highest rate since June 1980. Food price inflation in the OECD area picked up strongly to 5.5 % in November, compared with 4.6 % in October. Excluding food and energy, OECD year-on-year inflation rose more moderately, to 3.8 %, compared with 3.5 % in October, though it contributed significantly to headline inflation in a number of large economies.

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In November, year-on-year inflation increased in all G7 countries, except in Canada where it was stable at 4.7 %, and with a wide range of different inflation rates among them.

While year-on-year inflation increased in November to 6.8% in the United States (from 6.2% in October), it rose to 5.2 % in Germany (from 4.5 %), to 4.6 % in the United Kingdom (from. 3.8 %), to 3.7 % in Italy (from 3.0 %), to 2.8 % in France (from 2.6 %) and to 0.6 % in Japan (from 0.1 %). Differences in overall inflation rates across G7 countries were largely related to differences in inflation rates excluding food and energy. Non-food and energy items were the main contributors to overall inflation in the United States, the United Kingdom, and Germany where it contributed 4.3, 3.3 and 2.7 percentage points to the inflation rate, respectively. Their contributions were more limited in France and Italy (both by 0.9 p.p.).

In all G7 countries, inflation between November 2020 and November 2021 was largely driven by increases in energy prices, contributing to overall inflation from 1.2 p.p. in the United Kingdom to 2.6 p.p. in Italy. Food price increases were lower than overall price increases in all G7 countries except in Japan.

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In the Euro Area, overall inflation (as measured by the HICP ) rose to 4. 9% in November 2021, compared with 4.1 % in October, mainly driven by developments in Germany, France, Italy and Spain. Excluding food and energy, euro area inflation rose markedly to 2.6 % compared with 2.0 % in October. Eurostat’s flash estimate for the euro area in December points to annual inflation rising slightly to 5.0 % with inflation excluding food and energy stable at 2.6 %.

Visit the interactive OECD Data Portal to explore these data: OECD-Total, Euro area and the United States

Year-on-year inflation in the G20  area increased to 5. 9% in November 2021, compared with 5.3 % in October. Among non-OECD G20 economies, year-on-year inflation rose markedly in China (to 2.3 %, from 1.5 % in October). It also increased in South Africa (to 5.5 %, from 5.1 %), the Russian Federation (to 8.4 %, from 8.1 %), India (to 4.8 %, from 4.5 %) and Saudi Arabia (to 1.1 %, from 0.8 %). By contrast, inflation was stable in Brazil (at 10.7 %) and Indonesia (at 1.7 %), while it decreased slightly in Argentina (to 51.2 %, from 52.1 %).

Due to measures put in place by governments to reduce the spread of the Coronavirus (Covid-19), many statistical agencies are facing unprecedented collection, compilation and methodological challenges to develop indicators across a number of domains. To address these challenges, the statistical community is developing conceptual and practical guidelines to help ensure the continued delivery of timely and reliable statistics. However, in some cases, there will inevitably be an impact on quality and, as such, the statistics included in this press release may be subject to larger than normal uncertainty.