The main reasons why everything feels so expensive in 2025 include a combination of high inflation, supply chain issues, rising borrowing costs, stagnant wages, and housing shortages. Key factors causing high prices:

• Inflation: Prices of everyday goods and services increased significantly since the pandemic, hitting peaks above 11% inflation in some places. Though inflation is slowing, prices remain about 26% higher than before the pandemic on average.

• Supply chain disruptions from the pandemic caused shortages and delays, pushing prices up as demand outpaced supply.

• Borrowing costs have sharply increased due to higher interest rates, making mortgages, car loans, and credit card debt much more expensive, which indirectly raises the cost of living.

• Wages have been stagnant or growing very slowly compared to rising prices, reducing purchasing power for many workers.

• Housing shortages and high mortgage interest rates have made buying or renting homes more costly, as demand exceeds available supply.

These factors together create a financial squeeze on consumers globally, causing goods and services to be more expensive while incomes struggle to keep pace.

In summary, the high cost of living in 2025 is driven by persistent inflationary pressures fueled by pandemic aftereffects, supply chain issues, high interest rates, and a labor market where wages lag behind rising prices.