Inflation rates across major economies have remained stubbornly above the widely used target rate of 2%, with the US at 3.3% and the UK at 3.0%. This persistence has been driven primarily by the services sector, which alone has contributed roughly 1.4 percentage points to the median 2.6% total inflation across tracked countries. Looking ahead, price surges from the Iran war, particularly in energy, threaten even higher inflation, and many central banks are now signaling an end to rate cuts.
Benn Steil, DPhil Senior Fellow and Director of International Economics
Council on Foreign Relations 58 East 68th Street, New York, NY 10065 tel: 212 434 9622 email: bsteil@cfr.org
