Inflationary forces steady, CPI inflation high in many nations: Fitch

Central banks have responded by raising interest rates at a much more rapid pace than envisaged in the middle of the year as highlighted in Fitch’s latest ‘20/20 Vision’ chart pack.

Energy and food prices have been key drivers but core inflation pressures have also increased. Central banks have responded with further tightening: policy interest rates have reached 4.5 per cent in the United States, 2.5 per cent in the euro zone and 3.5 per cent in the United Kingdom.

Central banks in Switzerland, Australia, Canada, India, Korea, Indonesia, Mexico and South Africa have also raised rates, Fitch noted in a release.

Gross domestic products (GDP) in the third quarter this year were generally stronger than anticipated despite high inflation, the rating agency noted.

This was especially the case in China, South Africa and Poland, which recorded quarter-on-quarter (QoQ) growth of 3.9 per cent, 1.6 per cent and 1 per cent respectively.

The United States had a non-annualised QoQ growth of 0.7 per cent, while the eurozone managed to avoid contraction, expanding by 0.3 per cent QoQ. However purchasing managers’ index balances in Europe have deteriorated in recent months and China’s activity data for October and November weakened markedly.

ALCHEMPro News Desk (DS)