MNI BRIEF: Carney-Higher Structural Price Pressures Globally
MNI (OTTAWA) - Central banks face greater inflationary pressures in a global economy with more geopolitical conflict and supply shocks, while expressing confidence policymakers will keep price gains under control, said Mark Carney, former head of the Bank of England and the Bank of Canada.
“It’s a prospect of structurally more volatile and potentially higher inflationary pressures,” the former central bank chief said at a weekend talk hosted by the Group of 30 in Washington. (See: MNI INTERVIEW: Canada Faces Trouble Under Harris Or Trump- EDC)
Government budgets in an "adverse starting position" are also being squeezed, he said. "Adverse debt dynamics, lower growth, higher interest rates, and the challenge of productivity underneath it all, and then many calls through industrial policy and the motivations there,” Carney said.
He also agreed with the assessment from IMF meetings around “the gap that we see in the markets today between the fundamental level of uncertainty whether it’s from geopolitics, the path of the economy, the path of policy, and measured volatility and underlying risk premium, and how is that gap going to close?”