While both headline and core inflation are at present higher in the US, eurozone and Japan than, on average, in the past few years, few economists anticipate a prolonged overshoot of inflation targets – in the event that these targets are reached in the near future, which may not always be the case.
And, while tighter labour markets are finally pushing wage growth higher, this is in part offset by some acceleration in productivity, implying limited upward pressure on prices from unit labour costs.