Why it matters
When prices rise faster than wages, households can buy less with the same income, and central banks may raise interest rates in response.
Inflation in the news
More Economy terms
Economy
Central bank
The public institution that manages a country's currency, money supply and benchmark interest rate, such as the Federal Reserve or the Reserve Bank of India.
Economy
Interest rate
The price of borrowing money, expressed as a percentage of the amount borrowed. A central bank sets a benchmark rate that other rates follow.
Economy
National debt
The total amount a government owes to lenders, built up from past budget deficits.