Getting over an inflation shock

This monthly commentary gives a roundup of global markets and trends.

In this edition:

• Concerns that inflation may revive are weighing on financial markets, with government bond yields at their highest since 2007
• Higher oil prices are adding to overheating worries. Oil prices have been a major factor in previous inflation spikes
• Surveys of inflation expectations continue to ease, which is reducing the pressure on the Bank of England to raise interest rates
• A key uncertainty is the ultimate impact higher interest rates will have on the economy, which operate with an unpredictable lag
• New BRICS on the bloc – the emerging world seeks to challenge western economic dominance