Bank for International Settlements General Manager Agustin Carstens leaves after G-20 finance ministers and central banks governors family photo during the IMF/World Bank spring meeting in Washington, US, on April 20, 2018.LONDON - The world is facing a new era of higher inflation and interest rates as deteriorating ties between the West, Russia and China and Covid after-effects drive globalisation into reverse, the head of the Bank for International Settlements has warned.
"A key message is that we may be on the cusp of a new inflationary era," the general manager of the BIS central bank umbrella group, Agustín Carstens, said on Tuesday . There are also signs that the expectations of consumers, businesses and financial markets for how high inflation will go are becoming "unmoored".
"But central banks have been here before," he said. "They are fully aware that the short-term costs in terms of activity and employment are the price to pay to avoid bigger costs down the road."