Markets seem optimistic that the global inflation surge is over. UK inflation has dropped to 7.9%, the lowest for more than a year; US inflation has fallen even more to 3%.
The trends in Europe have been a little more mixed, but mostly positive: Spain’s rate is now down to 1.9% – a spectacular fall from almost 11% a year ago.
In response, investors are increasing their bets that central banks will soon be cutting rates, and beginning to rotate back into interest-rate-sensitive sectors.
