Higher oil prices not a game-changer for inflation

We are not convinced that the increase in oil prices has set the stage for a sustained rebound in inflation. Accordingly, there is little chance that developed market central banks will resume or extend tightening cycles in response. That said, if oil prices rose a lot higher and stayed there, policymakers would not be able to dismiss the risk of ‘second-round effects’ on inflation as easily as they did in recent decades.