“The tide has turned,” Michael O’Rourke, chief markets strategist at JonesTrading, said. “Stagflation is a legitimate, if not likely, threat.”…

“Consumers are dipping into the savings amassed during the pandemic to keep spending afloat in the face of blistering inflation,” said Diane Swonk, chief economist at Grant Thornton. This is because wage increases haven’t kept pace with inflation. Average hourly wages rose 5.6% over the last 12 months in March, but consumer inflation jumped 8.5%.

“The niggling worries are still there that as the cost-of-living squeeze intensifies and as savings are eaten away, there may be less appetite to pay for an easier life,” wrote Susannah Streeter, senior investment and markets analyst with Hargreaves Lansdown, in a commentary. “With many supermarkets and restaurants set to pass on the cost of higher commodity prices, more consumers may begin to trim budgets by starting with little luxuries like on demand delivery.”