The sharp rise in agricultural commodity prices as a result of the war in Ukraine has boosted food inflation to a multi-decade high, adding 0.6%-pts to average inflation in advanced economies compared to our pre-invasion forecast. This effect will fade as agricultural prices cool and base effects kick in over the months ahead. But with high food inflation already contributing to lower real incomes among DM households, we expect consumer spending growth to slow this year.
Markets Drop-In (11th May, 10:00 EDT/15:00 BST): We’re discussing our Q2 Outlook reports and what they say about the potential performance of bonds, equities and FX rates as inflation peaks in a special 20-minute briefing on Wednesday. Register now.
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