“The battle against global inflation is over the edge, and the economy is expected to cut interest rates next year.”

“The battle against global inflation is over the edge, and the economy is expected to cut interest rates next year.”
As the fight against inflation that the economy faces around the world has stabilized to some extent, central banks in various countries have reportedly opened the door to lower interest rates next year.
According to the Wall Street Journal, inflationary pressures are easing faster than expected in developed countries, and analysts say central banks have now reached a turning point in the fight against inflation over the past two years.
Recently, consumer inflation has fallen to less than 5% in the UK and around 3% in the US and the eurozone.
In particular, in the UK, consumer prices rose 4.6% last month compared to the same period last year, a significant drop from the previous month, the lowest level since October 2021. Previous economists expected a 4.8 percent rise.
It is not believed that the situation in the UK is anything special. Even in Europe, some policymakers rate the victory in the fight against inflation in a short period of time, and it has been pointed out that it was done in a much shorter time than in the 1970s.
As a result, central banks are expected to lower interest rates next year, which is expected to be a positive sign for the economy’s gradual stabilization. “It’s going to be a turning point for inflation,” said Stefan Gelach, a former executive at Ireland’s central bank, adding that investors may be surprised by the central bank’s rapid rate cuts next year.
However, due to geopolitical tensions and demographic factors, a return to the pre-pandemic era of ultra-low interest rates is unlikely. Even in this situation, central banks believe that inflation levels have not yet reached their target of 2%, and that they are paying attention to a number of factors, including wage growth and regional conflicts.
Michael Saunders of Oxford Economics issued a note expressing relief to investors, saying, “Inflation and interest rates will fall significantly next year across the developed world.”
See Korea Town Daily