Stronger than expected US inflation data this week has dampened hopes that the Fed might swiftly reduce interest rates in the coming months. This comes on the heels of a flurry of firmer-than-expected US economic data in recent weeks that had previously undermined the case for an early pivot toward looser monetary policy. Still, as we illustrate in several of our charts this week, evidence is accumulating to suggest that tighter monetary policy is taking a toll on the world economy. This week we home in on:
·         The UK and Japan’s recession phase
·         The weakness of Japan’s domestic demand growth
·         Labour market inactivity in the UK
·         Consensus growth and inflation forecasts for 2024
·         The shifting nature of the growth and inflation consensus
·         US service sector inflation

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