The markets have swung too far from worrying about deflation towards worrying about inflation. To be sure, inflation will be higher than otherwise over the next few months as a result of the recent surge in global commodity prices. Tax increases will also play a part, notably in the UK (VAT) and Japan (cigarette duties). Indeed, inflation may even have turned positive in Japan last month. Headline inflation has already risen above the comfort zone in China and has been too high for a while in India.
Become a client to read more
This is premium content that requires an active Capital Economics subscription to view.
Already have an account?
You may already have access to this premium content as part of a paid subscription.
Sign in to read the content in full or get details of how you can access it
Register for free
Sign up for a free account to:
- Unlock additional content
- Register for Capital Economics events
- Receive email updates and economist-curated newsletters
- Request a free trial of our services