Inflation collapses around the world

Load Error The Organisation for Economic Cooperation and Development (OECD) said annual growth in the price of goods and services across the group of 37 advanced countries slowed significantly in March as Covid-19 brought business and social activity to a near standstill. In a reflection of evaporating demand from consumers and businesses as governments impose tough lockdown measures to limit the spread of the virus, inflation across the OECD area dropped to 1.7% in March from 2.3% in February, the largest deceleration since the 2008 financial crisis. Janet Henry, the global chief economist at HSBC, said she expected inflation in the US, eurozone and most of the G10 group of wealthy countries to turn negative within the next couple of months. “Inflation is heading even lower, dragged down by the latest oil price collapse.” She warned that inflation could soar if governments and central banks overestimated the damage to global supply chains caused by the pandemic, and offered too much support to businesses and households to keep spending.