Headline inflation to fall sharply in 2019 - Capital Economics
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Headline inflation to fall sharply in 2019

Global Inflation Watch
Written by Capital Economics Economist
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Headline inflation is set to decline in the coming months, due to the recent slump in oil prices, and we think it will remain below 2% in most advanced economies next year. Tightening labour markets have already fed through to higher average earnings growth this year and we suspect that wage inflation will rise a bit further in most economies next year. But, in general, we do not think that this will be enough to lift core inflation above central bank targets. Core inflation looks to have peaked in the US, it will probably rise only gradually in the euro-zone, and it is likely to stay well below target in Japan. Further ahead, we expect core inflation to decline again in most countries by 2020, as the world economy continues to slow.