Capital Economics’ Global Central Bank Watch newsletter this week (27th April) focused on the global threat of deflation or lack of it.
There are some signs that seem to suggest that the threat of deflation has vanished almost as suddenly as it appeared. Price pressures have picked up a bit during the past month or two.
Deflation concerns
Deflation concerns picked up during the first two months of the year as actual inflation rates tumbled, with the aggregate inflation rate in advanced economies dropping from 1.5% in November to just 0.5% in January. By February, inflation had fallen below 1% in half of the 90 economies tracked by Capital Economics. A third of the economies tracked were already reporting negative rates.
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