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Europe more concerned than US about ‘last mile’ of inflation
Debates about the ‘last mile’ of bringing inflation back to 2% targets are raging across both sides of the Atlantic. Perspectives on the issue are one factor shaping expectations for the stance of monetary policy and central bank rate cuts. Disinflation is present in the UK, euro area and the US, and progress has exceeded expectations. Energy prices have come down and their previous shock on economies has moderated. Supply chain pressures are easing. Central bank rate hikes have helped moderate demand pressures, to the extent these existed, cooling price increases. Yet, services prices are not retreating as ... (full story)