Both of the two top central banks considering an interest rate rise from near-zero are hoping for a significant pickup in wage inflation and have been waiting a long time for it to turn up.
For all its single-minded focus on lowering inflation, India’s central bank may be forced to acknowledge slowing growth in Asia’s third largest economy by cutting interest rates — probably faster than it expected.
British wage growth will outstrip the Bank of England’s forecast this year but that doesn’t mean the first rate hike will come sooner.
Brazil’s relentless series of interest rates hikes is successfully lowering inflation expectations – despite recent signs to the contrary, from lottery to tomato prices.
We all now know by now that British inflation has dipped to slightly less than zero, its weakest since 1960. Much of the recent weakness is down to the same reason inflation is so low in the euro zone, Britain’s main trading partner: the collapse in the price of oil.
Euro zone inflation rose to zero in April from -0.1 percent and in Britain it fell to -0.1 percent from zero, the first negative reading since the 1960s.