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Middle East tensions not yet a major threat to inflation

As things stand, higher oil prices will boost inflation in advanced economies by only a few tenths of a percentage point in the months ahead and we still expect this boost to fade as the year goes on. There are upside risks relating to tensions in the Middle East and these will add to central banks’ caution. But we still see the ECB and Bank of England cutting rates from June and the US Fed from September.

Given the wider interest, this Global Economics Update is also being sent to clients of our Europe Economics Service.

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