Natural disasters like severe droughts, hurricanes or volcanoes could also drive up prices. For example, if the wheat crop of a major wheat producer is destroyed due to extreme drought, then all wheat-based products will increase in price as there is a production shortage.
Employees have gotten used to the rising cost of living in modern times. As a result, they anticipate the rise in inflation and demand higher salaries to maintain their standard of living. This increases production costs for companies, which could push up the prices of goods and services. The rise in wages means more disposable income for consumers and a higher demand for goods as they spend this disposable income, resulting in even higher prices. It’s like a vicious circle that will ultimately bring on higher inflation.
Inflation can be caused by too much money in the economy. Money has a certain value, and like supply and demand, if there is too much money floating around, then the value of money drops (a surplus makes things cheaper while a shortage makes it worth more; for example, diamonds are valuable because they are rare, if suddenly there was a surplus of diamonds, then prices would drop because they are not as rare and valuable anymore).