Central Banks under Pressure from Global Inflation

“Despite the welcome turn in inflationary developments, the path towards sustained price stability remains uncertain and fraught with risks,” Isabel Schnabel, Member of the Executive Board of the ECB, said at the Euro50 Group conference

Current global economic crisis is complicated by the fact that the world’s central banks underestimated inflation last year. This has led to massive layoffs and rate hikes. Now the CBs must wait long enough for past rate rises to filter through the economy without underestimating inflation again

Crucially, businesses and households might have adjusted to a new world of soaring prices by permanently changing their behavior. If so, it could be very costly to return to the old world of low and stable inflation, requiring much higher interest rates, said Joerg Kraemer, chief economist at Commerzbank

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British Grocery Inflation Keeps High in the Sky

Market researcher Kantar said annual supermarket inflation in the U.K. was 16.5% in the four weeks to June 11, forcing people to change how they eat and cook as household budgets remained strained

The figures came a day before the official data on inflation, which is expected to show food and drink prices rose at an annual rate of 19.1%m undermining Rishi Sunak's key pledge to halve inflation in 2023

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U.K. Inflation No Better than It’d Be

British CPI defied expectations of a slowdown and held at 8.7% in May, putting yet more pressure on the Bank of England a day before it is expected to raise interest rates for the 13th time in a row to tame stubborn price growth

On a monthly basis, headline CPI increased by 0.7%, while core inflation – which excludes volatile energy, food, alcohol and tobacco prices – gained by an annual 7.1%, up from 6.8% in April and the highest rate since March 1992

All-in-all, it means not only more expensive flights or the rising cost of second-hand cars, live music events and computer games – it means British inflation is once again the fastest of any major advanced economy. Thanks, Rishi!

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Air from Canada’s Fires Carried in the U.S. and over the Atlantic

This year is on track to be Canada’s worst wildfire season on record, according to data from Copernicus, Europe’s Earth observation programme

Since the start of May, total emissions have surpassed the annual total for 16 of the past 20 years

As fires rage across the country, the experiences of those who lost everything in Lytton in 2021 raise larger questions about Canada’s ability to rebuild

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