ANNABEL BISHOP: When will inflation fall low enough to stop rate hikes?
Supply chains are also still under pressure, which has added to producer costs
Globally and domestically very high inflation has prompted central banks around the world to raise interest rates, typically quite rapidly, which has dulled confidence measures, whether those of investors, businesses or households. The focus is squarely on inflation and on the increased financial hardship often experienced from higher interest rates — in particular rapidly higher rates.
The bad news is that inflation is not expected to fall quickly in the rest of 2022 and regain the targets central banks wish inflation to run at. So higher interest rates are likely. The good news is that international commodity prices have been falling, though not all of them are below where they were a year ago, with price inflation measured for the latest set of prices by comparing them with the previous period, whether that is a month or year ago. ..
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