Analysis: Could inflation derail the recovery?

Variants, vaccine distribution and the growing threat of inflation are just some of the factors that could affect the world’s economic trajectory over the coming months and years

US Federal Reserve officials have described the price surge as merely temporary, but it may have to change its position. Picture: Getty

Since last spring, it has been clear to me that a quick and sizeable recovery would follow from the pandemic-induced recession, owing to Western governments’ massive fiscal and monetary-policy responses and the high probability that effective vaccines would be forthcoming. And as the scientific evidence in favour of the new emergency-approved vaccines continued to pile up, so too did the likelihood of a strong recovery.

As I have noted previously, all of the most reliable ...