Oxford Economics Flags Low 'Don't Know' Rates as Sign of High Inflation Attention
Updated
Updated · Financial Times · Jul 8
Oxford Economics Flags Low 'Don't Know' Rates as Sign of High Inflation Attention
1 articles · Updated · Financial Times · Jul 8
Summary
Oxford Economics’ Daniel Harenberg says unusually low “don’t know” responses in household inflation surveys signal that the public is paying close attention to prices.
The report argues those answers, often ignored in central-bank-watched surveys, act as a proxy for inflation attention and can shape households’ inflation expectations.
US and eurozone “don’t know” shares are at unusually low levels, Japan’s are down for year-ahead inflation views, while UK current-inflation readings have returned to their long-run average.
Google Trends points the same way: inflation-related searches surged in the second half of 2021 and have stayed elevated, with monthly searches above the 75th percentile since the pandemic in all economies studied.
Harenberg says that leaves economies in a “high inflation-attention regime,” where shocks such as rising oil prices can feed inflation more strongly, though he stops short of calling an attention-price spiral inevitable.