The Banking Executive Magazine - April 2022 Issue

Conflict in Ukraine sures that will be tough to combat in the current uncertain context. Of course, the additional inflationary pressures from the Ukraine conflict are also complicating the challenge that policymakers in rich Western economies face in tackling rising prices without causing a hard eco- nomic landing. Oil is a universal in- termediary good, which influences the costs of commodities and serv- ices, as well as transport costs, in multiple ways. Oil-price increases can thus be a sig- nificant driver of cost-push inflation even at the best of times. But infla- tion in rich countries was already at levels they had almost forgotten. Pol- icymakers also appear to consider only the most simplistic weapons ISSUE 160 APRIL 2022 the BANKING EXECUTIVE 33 Oil is a universal intermediary good, which influences the costs of commodities and services, as well as transport costs, in multiple ways