inflationary spiral
C2Formal, Technical
Definition
Meaning
A self-perpetuating cycle where rising prices (inflation) lead to demands for higher wages, which in turn cause businesses to raise prices further, fueling more inflation.
An economic situation characterized by a continuous, accelerating rise in prices and wages that becomes difficult to control, often triggered by a supply shock, excessive demand, or a loss of confidence in a currency. It can also refer metaphorically to any escalating, self-reinforcing cycle of increase.
Linguistics
Semantic Notes
Primarily an economic term; implies a loss of control and negative consequences. Often used in discussions of macroeconomic policy, historical economic crises, and warnings about future economic risks.
Dialectal Variation
British vs American Usage
Differences
No significant lexical or syntactic differences. Both use the term identically in economic discourse.
Connotations
Identical negative connotation of an out-of-control economic situation.
Frequency
Slightly more frequent in UK media and academic writing, reflecting a historical focus on inflation management. In the US, the term is equally understood but may be used alongside more general phrases like "runaway inflation."
Vocabulary
Collocations
Grammar
Valency Patterns
The country entered [an inflationary spiral].Rising energy costs triggered [an inflationary spiral].Policymakers feared [an inflationary spiral] would develop.The economy is caught in [an inflationary spiral].Vocabulary
Synonyms
Strong
Neutral
Weak
Vocabulary
Antonyms
Phrases
Idioms & Phrases
- “[To be] on a hamster wheel of inflation”
- “[To be] in a vicious cycle of rising costs”
Usage
Context Usage
Business
"The CFO warned that the new union agreement could start an inflationary spiral, crippling our profit margins."
Academic
"The 1970s provided a classic case study of an inflationary spiral stemming from oil price shocks and accommodative monetary policy."
Everyday
"With groceries and rent going up every month, it feels like we're stuck in an inflationary spiral with no way out."
Technical
"The model simulates the conditions under which an exogenous supply shock can initiate a sustained inflationary spiral via inflation expectations becoming unanchored."
Examples
By Part of Speech
verb
British English
- The economy began to spiral into inflation.
- The government's actions spiralled inflation out of control.
American English
- The market is spiraling into inflationary territory.
- Loose policies could spiral inflation upward.
adverb
British English
- Prices rose spiral-fashion throughout the year.
- The economy worsened spirally.
American English
- Costs increased spirally, month after month.
adjective
British English
- The inflationary spiral dynamics were clear.
- They faced a spiral inflationary crisis.
American English
- The inflationary spiral effect devastated savings.
- Spiral inflationary pressures emerged.
Examples
By CEFR Level
- When prices and wages keep going up quickly, it can start an inflationary spiral.
- An inflationary spiral is bad for people who save money.
- The central bank raised interest rates to prevent the economy from entering a dangerous inflationary spiral.
- Economists argue that the current wage increases could trigger an inflationary spiral if not managed carefully.
- Breaking out of the entrenched inflationary spiral of the 1970s required politically painful monetary tightening across the Western world.
- The risk is not merely heightened inflation but a full-blown inflationary spiral, where expectations become unmoored and the process becomes self-fulfilling.
Learning
Memory Aids
Mnemonic
Think of a spiral staircase going upwards: each step (price rise) forces you to take the next step (wage demand), taking you higher and higher (inflation) without an easy way down.
Conceptual Metaphor
INFLATION IS A UPWARD SPIRAL / A VICIOUS CIRCLE. The spiral metaphor implies being trapped in a continuous, accelerating motion with no clear exit.
Watch out
Common Pitfalls
Translation Traps (for Russian speakers)
- Avoid a direct word-for-word translation that might sound like 'inflationary screw' or 'inflationary whirlwind'. The correct economic term is 'инфляционная спираль'.
- Do not confuse with 'гиперинфляция' (hyperinflation), which is an extreme result of a spiral.
Common Mistakes
- Using 'inflationary circle' instead of the fixed collocation 'inflationary spiral'.
- Misspelling as 'inflationary spiral' (correct) vs. 'inflation spiral' (less common).
- Using it to describe any price increase, rather than the specific self-reinforcing cycle.
Practice
Quiz
What is the primary characteristic of an 'inflationary spiral'?
FAQ
Frequently Asked Questions
Inflation is a general increase in prices. An inflationary spiral is a specific, dangerous situation where inflation feeds on itself in an accelerating cycle (prices → higher wages → higher prices), making it much harder to stop.
Yes, it can be triggered in a strong economy by excessive demand (demand-pull inflation) or in a weaker one by a supply shock (cost-push inflation), especially if central banks fail to anchor inflation expectations.
Typically through contractionary monetary policy (sharp interest rate hikes) to reduce demand and break the cycle, often causing a temporary recession. Incomes policies or credible central bank communication can also help.
Not exactly. An inflationary spiral describes the process or mechanism of acceleration. Hyperinflation is the extreme, catastrophic outcome of that spiral becoming completely uncontrolled (e.g., monthly inflation exceeding 50%).