Global inflation looks set to undershoot consensus forecasts, amid falling commodity prices, cooling labour markets, and an absence of inflationary spillovers from tariffs. In the US, we expect core inflation to ease later this year once the boost from tariffs fades and the disinflationary effects of AI-powered productivity gains feed through. In the euro-zone and UK, softer wage growth will reduce services inflation from current elevated rates. Meanwhile, in China, we expect the recent uptick in inflation to give way to renewed persistent deflation. Inflation in most major economies should be within 1%-point of central bank targets this year, with inflation skewed below target in Asia and above in emerging Europe.
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