Central bankers are feeling smug. The fears of 12 to 18 months ago that the global economy was likely to crash as a result of rising interest rates have proved unfounded. Inflation has subsided without the expected sharp increase in unemployment.
Although it hasn’t been reflected in Joe Biden’s opinion poll ratings, the US’s performance has been especially impressive, with growth remaining strong and not even the hint of recession. Other parts of the developed world – such as the UK and the eurozone have performed less well but have demonstrated a degree of resilience not predicted when inflation hit its highest level in 40 years back in 2022.
