According to Investopedia, "Inflation is a measure of the rate of rising prices of goods and services in an economy. Inflation can occur when prices rise due to increases in production costs, such as raw materials and wages. A surge in demand for products and services can cause inflation as consumers are willing to pay more for the product." Another key cause of inflation occurs when a government prints a surplus of fiat currency.
(To read more about inflation, click the Investopedia link above.)