All about inflation

Daily update

Tensions in the Gulf continue, and crude oil futures remain over USD 90 per barrel. This has reignited some inflation concerns. The fact that consumers have shifted spending patterns in response to higher oil prices is not properly reflected in inflation calculations—and while the impact will not be dramatic, it does mean that the damage to real incomes is slightly less than inflation data suggests.
UK July inflation data was as expected. The peculiarities of electricity pricing in the UK meant that there was an increase reflecting the lagged costs of the Gulf war. High up in the supply chain, input producer prices were less than expected.
US President Trump announced that US importers of Canadian goods will not be forced to pay a 50% tariff, two hours before the tariffs were due to take effect. Investors are not, perhaps, entirely surprised by this policy reversal. The US affordability crisis is a major political concern, and this very visible policy would have raised consumer prices.
ECB President Lagarde is speaking at a World Economic Forum event. There are two reasons to be interested: Lagarde has been uncharacteristically quiet recently; media reports suggest that Lagarde wishes to lead the WEF, and may exit the ECB early to do so.