Inflation is turning into a global phenomenon as the prices of food and energy continue to rise worldwide.

The overall Consumer Price Index (CPI) — a measure of inflation at the retail level — picked up the pace in February, rising at an annual rate of 7.9%, up from 7.5% in January, according to the Bureau of Labor Statistics. The February inflation number is the highest in the last 40 years.

Core inflation, which excludes food and energy from the calculation, rose at a slower pace — 6.4% in February — meaning that food and energy price hikes have been leading inflation higher.

“Increases in the indexes for gasoline, shelter and food were the largest contributors to the seasonally adjusted all items increase,” said the Labor Department. “The gasoline index rose 6.6% in February and accounted for almost a third of the all items monthly increase; other energy component indexes were mixed. The food index rose 1% as the food at home index rose 1.4%; both were the largest monthly increases since April 2020.”

The Producer Price Index (PPI) — a measure of inflation at the wholesale level — rose at an annual rate of 9.3% in February, up from 8.9% in January. It was the 12th consecutive increase and the highest since 1985, led by price hikes in food and energy.

Inflation picked up the pace in the EU, too, with the CPI running at an annual rate of 5.8% in February, compared to 5.1% in January. Things are expected to get worse as the Russia-Ukraine war keeps pushing the price of food and energy higher by the day.

"Gas price trajectory is war-dependent, but skewed to higher levels over the short term,” said Van Hesser, chief strategist at Kroll Bond Rating Agency. “Much of what the West can do to offset supply shocks [increase domestic production, open up supply from sanctioned countries] will take time to develop. I expect to see upward pressure on the cost of living driven by higher energy and food costs offset to some degree by peaking prices for goods.”

Rising inflation worldwide undermines consumer spending, the most significant component of every country’s gross domestic product, and raises serious concerns among economists about the fate of the economic recovery from the pandemic recession.

“Higher inflation is serving as a 'tax' on consumers and businesses that are clearly impacting sentiment. Add in tighter financial conditions and uncertainty related to war, and you have a significant headwind to economic growth," said Hesser.

The European Central Bank cut its growth forecast for 2022 and that raises the prospect of 1970s-style stagflation.