Inflation has peaked in most countries, indicators suggest. Factory-gate prices, commodity prices, and expectations of future inflation have all dropped in recent weeks, the Financial Times reports. [Global inflation likely to have peaked, key data indicators ... – FT]
Pressure on supply chains, caused by the war in Ukraine and lockdowns in China, appear to be easing. But oil and gas supplies are still constrained, so while inflation levels will drop, they will probably remain above target levels.
Key data indicators suggest that this year’s rampant global inflation has peaked and that the pace of headline price growth is set to slow in the coming months.
Factory gate prices, shipping rates, commodity prices and inflation expectations have all begun to subside from their recent record levels.
These data series are widely watched by economists and policymakers as they provide an early indication of the trends that will shape the headline inflation calculation.
According to economists, the figures suggest that price pressures on global supply chains are easing, making it likely that headline inflation will fall from the historically high rates that hit household finances and business activity in recent months.
That would be welcome news for leading central banks, which have been raising interest rates rapidly in a co-ordinated effort to tame inflation, risking plunging major economies into recession by doing so.
Inflation has already peaked across emerging markets, according to Capital Economics, with consumer prices falling in Brazil, Thailand and Chile, while recent data shows a weakening of some price pressures in developed economies.
In Germany, factory gate prices fell 4.2 per cent in October compared with the previous month — the largest monthly fall since 1948. In the US and the UK, annual producer price inflation has been slowing since the summer.
Nearly all the G20 group of leading economies that have released their October producer price indices reported a slower pace of annual growth than in the previous month, including Spain, Mexico, Portugal and Poland.
