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Overview – Inflation has proved somewhat stickier than we had anticipated, but the outlook of lacklustre growth, softening labour markets, normalising supply conditions and falling energy costs is consistent with further falls to come. Tariffs are a fly …
29th January 2025
Overview – With goods inflation vanquished, the last leg of disinflation in advanced economies must come from falling services inflation. After plateauing at the start of the year, services inflation has fallen in recent months, and we think that this …
24th October 2024
Overview – Inflation still looks set to be in line with central banks’ targets next year (see Chart 1), but upside risks have increased outside the US. With the sharp falls in energy and food inflation behind us, disinflation has slowed amid …
25th July 2024
Overview – Progress in getting back to central bank targets has slowed in several major economies. In advanced economies, a rebound in energy inflation has offset most of the drag on headline rates from lower non-energy goods inflation, and services …
26th April 2024
Overview – The easiest wins in the disinflation battle are behind us now that base effects from the previous surge in energy prices have run their course. Indeed, we expect energy effects to lift inflation in advanced economies slightly this year. But we …
18th January 2024
Overview – Global headline inflation has fallen sharply from its peak a year ago and, despite a temporary setback due to higher fuel inflation, we expect it to fall a lot further over the coming year. The huge drag from energy inflation is now largely in …
24th October 2023
Overview – Global inflation has almost halved since September last year and this trend has further to run. Admittedly, the fall in headline inflation so far mainly reflects the drag from lower energy price inflation, which has almost run its course. But …
25th July 2023
Table of Key Forecasts Overview – Headline inflation looks set to fall sharply as energy effects subside and the let-up in product shortages reduces goods inflation further. We also expect services inflation to decrease as demand weakens, allowing …
26th April 2023
Central banks focused on inflation for now, but will monitor credit in the months ahead Conditions were already tightening before recent turmoil… …and by Q3, lending surveys and spending data will show clear signs of strain Central banks are now in a …
5th April 2023
Markets’ focus shifting to forward guidance as pace of rate hikes slows Any hints of an end to tightening cycles are still strongly data-dependent But the data will allow for rate cuts sooner than many central banks now imply Now that inflation has …
8th February 2023
Table of Key Forecasts Overview – Inflation is finally falling and we envisage further sharp declines in almost all economies during 2023. (See Chart 1.) In most cases, this disinflation will be more dramatic than either the consensus of economists or …
3rd January 2023
The pace of global monetary policy tightening is slowing But neither history nor central bank guidance give a reliable steer of the future profile Early signs are that the Bank of Canada and US Fed will lead the retreat next year In recent weeks, …
10th November 2022
Inflation persistence has strengthened the drive for higher rates… … while weak exchange rates and fiscal policy concerns add to challenges for some. Peaks will be higher than we had assumed and the risk of policy mistakes has grown. Recent developments …
4th October 2022
Table of Key Forecasts Overview – There has been growing evidence that pipeline price pressures have eased, underlining our view that inflation will fall sharply next year. Commodity prices and shipping costs have fallen, product shortages have …
23rd September 2022
Banks are frontloading rate hikes to stem inflation risks and avoid more pain later on. Early signs are ok, with inflation expectations down and demand weakening somewhat. But rates could need to fall back before long, especially where housing risks …
4th August 2022
Table of Key Forecasts Overview – While inflation has broadened out and surprised to the upside in 2022 (see Chart 1), we maintain the view that it will fall sharply in the year ahead. For one thing, we expect commodity prices to fall. Even if we are …
28th June 2022
We have raised our interest rate forecasts as banks double down on hawkish stance Alarming inflation picture points to more big hikes in the near term…. … but weakening activity will warrant a slower pace of tightening before long. It’s been a momentous …
22nd June 2022
The switch from global QE to QT is imminent But not all banks will participate, with the BoJ still buying and the ECB on standby QT will contribute to a rise in yields, especially in US, but no global market meltdown The focus of recent weeks has been on …
18th May 2022
Table of Key Forecasts Overview – The war in Ukraine has caused price pressures to intensify again and we now expect global headline inflation to be one percentage point higher on average this year than we previously envisaged. Now is probably the point …
4th April 2022
War in Ukraine will not prevent policy tightening as inflation remains elevated. In the past, tightening cycles have tended to end in recession. But soft landings are achievable and delaying now would increase future risks. The war in Ukraine has worsened …
23rd March 2022
Inflation risks might spur an aggressive policy action similar to that of the mid-1990s. But this would be unusual and there are very good reasons for caution. Even those banks that start out fast will slow the pace before long. Monetary policymakers are …
10th February 2022
Table of Key Forecasts Overview – The inflation outlook for 2022 will be dominated by three key themes. First, headline rates will fall owing to a mixture of fading re-opening inflation, falling commodity prices, and base effects dropping out of the …
22nd December 2021
Most central banks will raise interest rates next year. But in some cases, interest rates may not rise by as much as markets are anticipating. And the People’s Bank of China will cut interest rates further. With underlying inflation set to stay …
21st December 2021
Global Inflation Watch is our in-depth quarterly guide to how price pressures are developing across advanced and emerging economies. This exclusive publication includes insight into how traditional sources of inflation are contributing to the current …
11th October 2021
Concerns that price pressures will become sustained have prompted a hawkish shift. We have brought forward anticipated rate hikes in the US, UK and some EMs. But we doubt that tightening will go as far as most central banks have implied. There has been a …
29th September 2021
High inflation has driven up rate expectations everywhere. But the inflation outlook is varied, and other aims will determine policy too. Norway and New Zealand will be first to tighten among DMs, others will delay. The rise in inflation and the question …
30th June 2021
Global Inflation Watch is our in-depth quarterly guide to how price pressures are developing across developed and emerging economies. This exclusive publication includes insight into how traditional sources of inflation are contributing to the current …
21st June 2021
Mandates have spread into equality, climate change and house prices in recent months Implications are mixed; Fed lower for longer, but RBNZ may need to hike sooner On average, mission creep points to more variable and probably higher future inflation …
29th March 2021
Table of Key Forecasts Overview – Inflation will rise sharply in every major economy in the months ahead, driven by a rebound in energy inflation, tax changes, and supply shortages. On average, CPI inflation in the advanced economies looks set to rise …
19th March 2021
Taper talk is premature and purchases typically won’t slow until next year There is absolutely no rush for central banks to shrink their balance sheets But when they do, the process will require some creative thinking Talk of tapering in recent weeks has …
4th February 2021
Table of Key Forecasts Overview – Energy price base effects will drive up inflation in the first half of 2021, but central banks will look through this. Indeed, in most cases, inflation should be around or below target over the second half of 2021 and …
17th December 2020
Central banks keen to bridge a difficult period before vaccines are rolled out… … and reduced fiscal stimulus shifts onus of supporting recovery to monetary policy The legacy of the virus will warrant rock bottom interest rates for several years The …
25th November 2020
Table of Key Forecasts Overview – The effects of demand weakness should continue to dominate those of supply constraints, leaving underlying inflation subdued in most parts of the world over the next few years. Policy measures including temporary VAT cuts …
21st September 2020
Other central banks won’t follow the Fed immediately… …but direction of travel is towards greater tolerance of inflation in advanced economies Japan’s experience highlights that some will have more success than others For the past thirty years the …
9th September 2020
Uptake of central bank lending facilities has been mixed But lending is reaching firms, either through governments or central banks… … and central bank backstops are offering important reassurance to investors This month has seen a further shift among the …
2nd July 2020
Table of Key Forecasts Overview – Over the next few months, inflation will be dominated by oil price effects as the previous slump unwinds and headline rates rise from their current lows. Some components of core inflation, such as airfares and …
25th June 2020
Numerous lending facilities have been either launched, revived, or expanded Many aim to provide liquidity to financial institutions and non-financial firms But the line between liquidity operations and monetary policy is sometimes blurred Traditionally, …
7th May 2020
Rates slashed to rock bottom and generosity of lending enhanced Massive asset purchases are intended to boost liquidity and will be reduced in time But radical sustained support seems possible, carrying future inflation risks for some What a difference a …
8th April 2020
We have condensed this edition of the Inflation Watch to focus only on timely data and coronavirus effects. While the coronavirus crisis will have both upward and downward effects on prices, we expect the net impact to be significantly disinflationary, …
31st March 2020
Central bank action so far focused on crisis management in virus-hit countries. Likely fallout reinforces our existing dovish views on several EMs. But the temporary shock does not yet warrant a response from advanced economies. With the coronavirus …
14th February 2020
Table of Key Forecasts Overview –Inflation in developed markets is likely to be stable in 2020 as a rise in energy inflation is offset by a drop in core. We forecast oil prices to rise to over $70pb in the coming years, so energy prices should now begin …
20th December 2019
While the Fed seems to have pressed pause, we wouldn’t rule out a December cut. Policy will be loosened further in the euro-zone, Australia and several EMs. But the impact will be modest, particularly in advanced economies. Following a wholesale shift …
11th November 2019
With interest rates near the lower bound, central banks are experimenting with tiers. But they reduce the impact of rate cuts and do little to support banks’ profitability. Such efforts add to signs that monetary policy is near its limits. Recent weeks …
26th September 2019
Table of Key Forecasts Overview – Inflation has fallen in most economies, due partly to lower energy inflation. Our forecast that oil prices will stabilise in the months ahead is subject to upside risks from tensions in the Middle East. But against the …
20th September 2019
Lagarde selection strengthens our conviction of ECB rate cuts and QE to come. Trump’s nominations may be less influential, but lend policy a dovish tilt. Next year’s change of guard at the Bank of England could be meaningful. Recent news about a number of …
11th July 2019
