Tough pill to swallow as ECB and Fed look to keep rates high

Interest rates are set to remain ‘higher for longer’ as central banks keep their efforts on tackling price rises

The medicine to fight inflation has been harsh. There’s no spoonful of sugar to make it go down easier. (Picture: Getty)

For much of 2021, the word ‘transitory’ was unavoidable. Central bankers were tripping over themselves to declare that the spike in inflation would pass as the world shook off the fastest rise in prices in decades.

Businesses emerging from hibernation needed to pay more to recruit staff. Raw material costs were shooting up, so consumers had to shoulder the increases. The result was much higher inflation.

For a generation where disinflation was fast becoming the ...