For months, official inflation figures have appeared to moderate. But the feeling in supermarkets, in rents, and in bills tells a different story. The question is no longer whether inflation will fall, but whether it will ever return to what it once was.

Recently, institutional discourse has insisted on conveying calm, claiming that inflation was transitory. Or at least a simple accident caused by the pandemic, logistical bottlenecks, or energy prices. And that once the situation normalized, prices would return to their place. Today, that promise rings hollow. And more and more economists admit what many households already know: perhaps we have entered a new normal of high prices.

For decades, Western economies lived within a historical exception: stable prices, low-interest rates, and abundant money. Any inflationary spike was considered a temporary anomaly that central banks would quickly correct. The key word was “control.”

That narrative broke in 2020. The pandemic disrupted global supply chains built on extreme efficiency criteria. The war in Ukraine sent energy and basic food prices soaring. And the response from governments and central banks — massive monetary expansion and unprecedented public debt — injected an enormous amount of liquidity into the economy.

According to Eurostat data, inflation in the euro area reached historic highs in 2022. Despite subsequent moderation, the general price level has not fallen; it has simply stopped growing as quickly. And this distinction is crucial: while inflation can decline, prices rarely do.

Structural Factors Pushing Prices Up

The problem is not merely cyclical. There are underlying forces pointing toward a change in economic regime. De-globalization is one of them. Companies are reconfiguring production chains to reduce geopolitical dependencies. Producing closer to home is safer, but also pricier. The energy transition, necessary and inevitable, involves multi-billion investments that are passed on to final costs. Demographic ageing pressures public systems and reduces the working population. And permanent geopolitical tensions introduce volatility that is no longer exceptional, but structural.

Added to all this is an often overlooked element: debt. States carry levels of indebtedness that make it very difficult to return to a world of low real interest rates without creating new distortions. In this context, moderate but persistent inflation acts as a silent tool of fiscal rebalancing.

Rising Prices, Wages That Do Not Keep Up

This is where inflation shows its most uncomfortable face. Despite wage revisions recently, purchasing power has not recovered. Data from Spain’s National Statistics Institute (INE) show wage increases that, often, only partially offset the rise in the cost of living. 

The result is a progressive erosion of middle incomes. It is not a tax approved by Parliament, but it acts as if it were. Savings lose value. Salaries barely stretch to the end of the month. And the ability to plan long term diminishes.

Housing is the clearest example. Soaring rents, limited supply, and wages that cannot keep pace. But it is not the only case. Food, insurance, basic services. What was once exceptional is now routine.

An Uncomfortable New Normal

Assuming that prices will not return to past levels is not pessimism. It is realism. The economy ahead will be more expensive, more volatile, and less predictable. Waiting for a return to a world of cheap money and contained prices may be a strategic mistake, both personally and collectively.

This does not mean resignation. It means adaptation. Understanding how structural inflation works. Reviewing consumption habits. Rethinking savings and wealth protection in an environment where idle money loses value year after year.

It also means demanding transparency. Macroeconomic figures may improve, but if they do not translate into real well-being, something is wrong. The gap between statistics and citizens’ perception is not a communication problem: it is a model problem.

Facing Inflation Head-On

Inflation is not just an economic indicator. It is a daily experience. And, like any persistent experience, it ends up shaping behaviors, expectations, and life decisions. Ignoring it or dressing it up with reassuring speeches does not help in making good decisions.

Understanding that we may have entered a new normal of high prices is uncomfortable, but necessary. It is the first step toward stopping looking back with nostalgia and starting to think strategically about how to protect the present and the future. Understanding structural inflation is the first step toward protecting oneself from it.

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