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Global economy enters new phase as pace of rate rises slows

Inflationary pressures are easing, but monetary policymakers’ job is not done yet

A further fall in US inflation on Tuesday and more modest rate rises by the world’s major central banks later in the week will set the tone for a fresh chapter for the global economy.

Headline inflation data in most economies will continue to improve in the coming quarters as the soaring of costs for energy and food that took place over the course of 2022 drop out of the annual calculations.

But monetary policymakers at the major central banks will worry that price rises will continue at a faster pace than they would like — and will remain open to further rate increases to show that they are serious about bringing inflation back to levels seen before the coronavirus pandemic.

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