This Is ‘the End of the Beginning' of the Battle Against Inflation, Economist Says

Agbo Blaua, in a speech from 1942 by Winston Churchill, quoted his remarks to assess the current state and efforts of policymakers around the world to control inflation: "This is not the end." It's not even the start of the end. He said: "Last, but not least is the tight labor market. You have a lower growth in labor productivity which is now pushing unit labor costs. This negative spiral of wages is now occurring."

Agbo Bloua stated that the impact of tightening monetary policy often lagged behind the real economy around three to five quarters. He said that excess savings accumulated during the pandemic provided a buffer for households and consumers, while businesses were able repair their balance sheets. If forecasts are accurate, global GDP growth will be 15.2% below trend. This was the case during the pandemic of 2020, and before that in the 1940s.