Silent killer

It is one of the most famous photographs of the 20th Century - a group of children in 1920s Germany playing with stacks of money like building blocks. Money had become so useless in this period due to hyperinflationInflation that reaches more than 50% per month. In such conditions, money quickly becomes worthless, and people simply stop using it. that workers transported their wages home in wheelbarrows.¹

This might provide some relief to those concerned about the UK's latest inflationAn increase in the price of goods in an economy.  statistics: it is not all that bad for Britain yet. The latest figures show that inflation in the country has risen by 10.1% in the 12 months to September, the fastest rate of inflation in 40 years.

Compared to wars and other crises, inflation might not seem like a serious issue, but 90,000 people die in poverty in the UK every year. This sum is even greater than estimated fatalities from the war in Ukraine.

Inflation has damaged societies for as long as economies have existed. So how does it keep happening, and what can three examples from history teach us?

The Hungarian pengo, 1946.

What was it? Hungary has the worst ever recorded case of hyperinflation in history. In the first half of 1946, prices doubled every 15.6 hours, and rose at a rate of 150,000% per day.²

What caused it? Hungary's government responded to its weak economy during World War Two by rapidly printing money, which pushed up prices.

How fatal was it? There are no detailed statistics for how many people died due to hyperinflation, but workers' real wagesWages adjusted for inflation - a guide to how standards of living have changed. fell by 80%, plunging millions into potentially fatal poverty.

The Great Babylon Inflation. Circa 323BC.

What was it? The first ever recorded inflation occurred just after the death of Alexander the GreatA king of ancient Macedon who is renowned as one of the greatest military leaders in history. He conquered a vast empire stretching from Greece to modern-day Pakistan., and halved the value of the currency of ancient Babylon.

What caused it? Historians think that the treasures brought back by Alexander from his conquests caused traders to push up prices to share in the goods.

How fatal was it? Inflation doubled the price of basic foodstuffs such as grain, rendering hundreds unable to afford the cheapest foods.

The Great Inflation. 1965 - 1982.

What was it? A long period of high inflation due to poor economic planning. The inflation rate rose as high as 14%.

What caused it? The inflation was caused by skyrocketing oil prices, currency speculation, and huge budget deficits.

How fatal was it? Across the entire period, millions died in poverty.

Yes: Statistics show that as many people can die as a result of poverty caused by inflation as in a major global conflict. The number of people who could suffer and die because of the current economic crisis should terrify us.

No: The statistics are not absolute. They only tell us how many people died in poverty, not as a result of poverty. The factors could be unrelated. We cannot be 100% certain inflation causes individual deaths.

Or... The statistics are worrying, but we cannot look at inflation as universally bad. Inflation can discourage saving and boost spending, and benefits those with debts. Small rates of inflation of around 2% to 3% are even encouraged by economists.