Lingering consumer anger over high prices is hurting politicians in advanced economies even though inflation is subsiding to normal levels. Discontent over the economy was a key motivator in this year's US election, contributing to Vice President Kamala Harris's defeat at the hands of Donald Trump. Incumbents in

countries including the UK and Japan have also suffered in elections this year partly because of anger at high living costs. And polling suggests the legacy of inflation will also play a role in national elections next year, including in Germany and Canada. On one level, this might seem surprising given

the average inflation rate across the OECD countries is now at its lowest level since the summer of 2021. But the level of prices remains far higher than before the pandemic, and this matters to consumers. Average price levels across the OECD were approximately 30% higher

in September 2024 than they were in December 2019, just before the pandemic. Food prices are about 50% higher than in December 2019, and while wages are now growing at a faster pace than prices, real incomes in many large economies

have only just surpassed pre-pandemic levels. Small wonder that consumer confidence remains below pre-pandemic levels in so many countries. All this is taking a toll on many governments' political fortunes.

Consumer anger over high prices piles pressure on politicians | FT #shorts

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High inflation's impact on political elections

Lingering consumer anger over high prices is negatively affecting politicians in developed nations, despite inflation decreasing.

Economic discontent influenced the US election, leading to Kamala Harris's loss.

Incumbents in the UK and Japan also faced electoral setbacks due to high living costs.

Upcoming elections in Germany and Canada are expected to be influenced by inflation's legacy.

Persistent high prices despite reduced inflation rates

OECD inflation is at its lowest since summer 2021, yet prices remain significantly higher than pre-pandemic levels.

Prices in September 2024 were about 30% higher than in December 2019; food prices are 50% higher.

While wages are increasing faster than prices, real incomes in many large economies have only recently exceeded pre-pandemic levels.

Consumer confidence remains below pre-pandemic levels in many countries.

The situation is negatively impacting many governments' political standing.