Since the pandemic, the rising cost of living has squeezed family budgets worldwide. Prices have risen, but wages haven't kept up. Households have struggled to make ends meet. But inflation is now on the way down, and relief is coming. Energy prices have dropped. And they will continue to fall and pull inflation down with them.
Energy companies, over the past two years, booked incredible profits. They also reinvested considerable sums to expand production and improve efficiency. This reinvestment will increase the global energy supply and help pull prices down. In the last 12 months, public energy companies worldwide have reinvested $428bn. That's 50% of their after-tax income (see: Global stocktake)βa lot of money going into new business. These firms earned a 24% return on their equity, so their bottom lines are set to increase by 12%. Lots of reinvestment at high returns means the energy supply will continue to grow.
Energy prices were the key driver of inflation on the way up. And thβ¦