Inflation slows. Why are prices still rising?

2026-09-11 · WekeyLab · AI-assisted explanation; source and arithmetic checks

A lower inflation rate does not necessarily mean lower prices. If prices rise by 5% in one year and by 2% in the next, they rise in both years.

A basket you can calculate

This is a hypothetical example, not recent Korean, US or UK inflation data. The basket contains the same items and quantities throughout.

The second increase adds 210 won. Over the two years, the basket becomes 7.1% more expensive. Adding 5% and 2% gives the wrong cumulative result: the second increase applies to the already higher price.

Why your experience can differ

A consumer price index combines changes across items using expenditure weights. Your household may buy a different mix. A change in your total spending may also reflect different quantities or products, rather than prices alone.

The official Korean explanations describe the construction of the index and why household experiences differ: consumer price index overview and understanding experienced inflation. These are Korean sources; this article does not present country-specific eligibility or financial advice.

Three checks for the next headline

Check the comparison period: last month or the same month last year? Check the coverage: the overall index or one item? Finally, distinguish a falling rate of increase from a fall in prices.

A slower rise is still a rise. The arithmetic above lets you verify the distinction without relying on a headline.