The world no longer plays in sync

In our monetary policy strategy assessment we looked at how structural forces – both familiar and new – are reshaping our economies. Not so long ago, free trade, globalisation and the absence of large-scale conflicts made it easier for central banks to keep inflation under control. But now increasing geopolitical uncertainty and growing economic fragmentation are making it harder to predict how inflation will evolve. Like an orchestra playing out of rhythm, the global economy no longer functions as smoothly as it used to. And this is bad for our economies and has an impact on inflation.