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Central banks face inflation and growth tradeoff as oil risk returns

With US inflation at 3.4% in July after easing on lower petrol prices, Brent crude around $90 could lift energy and transport costs later this year.

Reported · Written up by our desk · Economy

Central banks including the Federal Reserve, the ECB and the Bank of England are grappling with a policy tradeoff as inflation risks rise while growth slows, according to reporting by the Guardian.

The article notes inflation has been easing across industrialized countries, with US inflation edging down to 3.4% in July from 3.5% in June and 4.2% in May, helped by falling petrol prices.

However, the risk that the Middle East conflict could push oil higher is complicating forecasting, and the piece says Brent crude has risen again to about $90 per barrel, a move expected to raise energy and transport prices in the second half of the year.

It also highlights that Fed officials are weighing whether inflation could climb back toward 4%, and that Kevin Warsh has launched a broad review of Fed operations, drawing on advice from 15 outside experts.

Latest closeWTI crude $82.40 ▲1.4%|Brent $88.59 ▲1.8%

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