![]() ![]() West Texas Intermediate futures, the US oil benchmark, have risen 19% in that time. The price of Brent oil, the global benchmark, has climbed 16% since a low in late June. Global oil prices have shot up in recent weeks. While central banks should remain “vigilant,” according to Kroszner, he doesn’t see “inflation moving back to peaks that we saw over the last year,” because some of its driving forces - including supply bottlenecks and big spending by governments during the pandemic - are no longer at play. There are also signs that a mild recession in the euro area may already be over. A so-called “soft landing” - lower inflation but without a full-blown recession - appears to be within sight in the US and the UK. Major central banks have jacked up interest rates at a record clip over the past 18 months in a bid to curb price rises, even though the tightening campaign has hurt their economies. Inflation has been higher and stickier in the United Kingdom, coming in at 7.9% last month, down from the 11% it clocked in October, a 41-year high. The UN global Food Price Index rose in July, notching only the second monthly increase in a year of steady declines. Among the 20 countries sharing the euro currency, consumer prices increased by 5.3% in July, exactly half of the record-high inflation reached in October last year. Data due Thursday is expected to show that US inflation ticked up to 3.3% in July. In the United States, consumer prices climbed 3% in June - a gentle rise compared with a four-decade high of 9.1% hit a year before. ![]() Overall inflation has slowed sharply in recent months. Price rises then gathered steam following Russia’s full-scale invasion of Ukraine in February last year as global food and energy prices soared. Inflation around the world began to accelerate in late 2021 as economies re-opened after the pandemic. “We’ve seen inflation come down, but we really need to see that this is something that’s going to be sustainably down.” “It would be foolish for any central bank to declare victory,” Randall Kroszner, a former governor of the US Federal Reserve System and now an economics professor at the University of Chicago Booth School of Business, told CNN. The battle to bring inflation down is far from over. Oil and food prices have jumped in recent weeks, and wages are still growing strongly in some of the world’s biggest economies. Some - like the US Federal Reserve and the European Central Bank - have started to signal that they will soon end their cycle of rate rises, and investors have been only too eager to call the end of the campaign, driving stocks higher as a consequence.īut their optimism may be misplaced. The fight against the steep price rises unleashed by the pandemic and war in Ukraine has been long and painful, with central banks hiking interest rates at a scorching pace to try to cool inflation. ![]()
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