The recent sharp rise in shipping costs is likely to have a smaller impact on inflation than the surge in freight costs in 2021, but it will intensify challenges for central bankers in completing the ‘difficult last mile’ of lowering inflation, says Fitch Ratings in its latest Economics Dashboard. The surge in freight costs in 2021 led to a significant increase in inflation, with IMF estimates suggesting an impact of about 1.5pp-2pp. However, the current jump is smaller and the economic backdrop is starkly different to 2021, when demand for consumer durable goods surged and the manufacturing sector boomed, resulting ... (full story)