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Surging inflation around the world is one of the biggest concerns for Organization for Economic Cooperation and Development, and it is creating a difficult challenge for central banks, Chief Economist Laurence Boone said.
Factors driving inflation include shipping costs and disruption from the Covid pandemic, wage growth in some sectors including hospitality, and energy prices, Boone said in an interview with Bloomberg Television’s Francine Lacqua and Dani Burger.
While the OECD expects inflation to continue quicken for a few months, she said the pressure should tail off as energy costs are a one-off adjustment and there is no sign of a wage price spiral.
Part of the challenge for central banks is deciphering what might be lasting, and Boone repeated her call for them to be clear about how they would act in order to anchor expectations.
“One of our biggest concerns is obviously inflation after the health crisis,” Boone said. “Central banks have the toughest job of all at the moment because they must distinguish between what’s temporary and what’s structural.”
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