High inflation to persist globally into next year, Reuters poll shows

What happened

A Reuters poll of more than 500 economists found high inflation will persist globally well into next year. They raised 2027 inflation forecasts for 31 of 50 economies. Oil has stayed above $100 a barrel since October 7 and topped $117 last week.

Confirmed

Global impact / market context

If inflation stays high, central banks may raise interest rates more, making borrowed money costlier for companies and households. That can reduce capital spending, squeeze profit per sale and pressure share prices, while bond yields stay elevated and cash available tightens.

Analyst inference

A global bond market selloff has already tightened financial conditions through higher yields, which means borrowing costs rise across the economy. More than $1 trillion of artificial intelligence investment since last year has made some economies more resilient even as households face cost of living pressure.

Analyst inference

What to watch

1. Watch whether inflation pressures broaden beyond energy costs from the Middle East conflict, since the poll says most central banks have raised rates only a few times or not at all. Confirmed
2. Watch whether central banks signal further rate increases if inflation spreads, because higher rates would raise borrowing costs for companies and could cut capital spending plans. Proposed
3. Watch oil prices staying above $100 a barrel, which keeps fuel and transport costs high for industries, and bond yields, which set borrowing costs for companies and households. Analyst inference

Evidence

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