Rising energy prices and disruption to international shipping risk “stalling” declines in inflation in leading economies, the International Monetary Fund has warned, telling central banks that the “last mile” of their battle against price rises may be the hardest.
In its latest assessment of global financial stability, the IMF said markets were vulnerable to another round of volatility if investors continued to push back their expectations for interest rate cuts this year, leading to falls in bond and stock prices.
“There is recent evidence that disinflation may have stalled in some countries and that underlying inflation may be persistent in some sectors,” Tobias Adrian, the fund’s financial counsellor, said. “In some cases, core inflation has come in higher than analysts’ forecasts for consecutive months. Higher-than-expected
