In China, where factory inflation hit 9.5% in August, power cuts have slashed output of goods from cement to aluminium. While higher agricultural commodity prices are behind the jump, JPMorgan analysts also attribute food price inflation to pandemic-related pressures such as logistics disruptions and transport costs. In emerging markets, where food makes up a large chunk of inflation baskets, there is more pressure to tighten monetary policy. For instance, markets see euro area inflation hitting 2% only after a decade, Danske Bank sees "upside risks to inflation expectations...once implementation of the green transition gathers momentum". Euro area labour costs fell in Q2 but inflation as well as inflation expectations are rising.

Source: bd News24 October 01, 2021 20:24 UTC