- Can economies see ‘immaculate disinflation’?
- Why lower inflation might not mean higher unemployment after all
Listen to the latest central bank press conferences, and you get the impression that things are starting to go as planned. Earlier this month, Bank of England (BoE) governor Andrew Bailey said that falling inflation “is what we expected to see. It is good news”, adding that “inflation will continue to fall over the next few months”. In the US, Fed chair Jay Powell sounds equally confident. He sees “the pieces of the puzzle coming together” as inflation eases.
After a disorientating period of high inflation and soaring interest rates, are economies finally starting to behave as normal? If so, unemployment could be about to climb. If textbook economics tells us anything, it’s that there's a direct link between joblessness and inflation rates.