Is hot global inflation set to resurge? Widely feared consumer price index acceleration in the US, UK and elsewhere – alongside US tariffs – has many fearing a return to the 2021-2022 period. That supposedly will whack global consumers and “much needed” 2026 rate cuts.
It is time to turn down the drama. Despite some tiny upticks globally, the inflation war is over.
First, understand this: when wars end, their destruction is not magically reversed. Peace just stops new destruction. It is the same with inflation. Current prices remain well above pre-pandemic levels, frustrating many.
The US’s CPI sits 26.4 per cent above December 2019 levels. The Eurozone’s harmonised index of consumer prices (HICP) is up 22.8 per cent. Canadian and Australian CPI are up 20.9 and 21.5 per cent, respectively. The UK’s is even worse, up 28.3 per cent.
CPI also understates many people’s experience. Hence, inflation angst is understandable. And fighting the last war – in this case, the recent years’ nosebleed inflation – is a natural, human response.
But prices and inflation are different. Inflation is the speed of changing prices – now 3 per cent year-on-year in America and 3.8 per cent in Britain, based on September CPI. Australia’s inflation of 3 per cent year on year in August echoes those. The Eurozone and Canada’s relatively cooler 2.2 per cent and 2.4 per cent September readings, respectively, nonetheless exceed hoped-for rates – and accelerated from August.
Current inflation pales versus recent highs. Since peaking at 9.1 per cent year-on-year in June 2022, US CPI cooled irregularly to September’s 3 per cent – above the Federal Reserve’s target (which is not based on CPI, for the record) but hardly indicating galloping prices.
The Eurozone’s 2.2 per cent year-on-year September inflation is far below October 2022’s 10.6 per cent peak and hovers around the European Central Bank’s 2 per cent target. UK, Canadian and Australian inflation trends all echo that.
Yet no evidence exists that central banks can fine-tune anything precisely to the decimal point. And price indexes are not so pinpoint accurate themselves. But the “war” is over.
Yes, overall prices are still rising globally, but they rarely fall. Select categories may, but broadly falling prices – deflation – almost never occurs, thank goodness.
Why? Deep deflation means severe economic contraction – far deadlier than inflation. Consider the US for its global economic might: Reversing US CPI’s post-pandemic rise would mean a situation close to the deflation seen during the Great Depression of 1929 to 1933, or the post-First World War downturn of the early 1920s.
Falling prices sound nice. But deep deflation drives consumers to delay non-essential purchases, expecting lower prices ahead, causing economic activity to collapse.
Winning the inflation war was never about dropping prices, just slowing their rise. Governments never seek zero or negative inflation anyway. Why? Because inflation is their friend, making repaying existing debt cheaper. US government debt tops $38 trillion. If inflation runs near 2 per cent – the Fed’s aim – this gets $760 billion cheaper in after-inflation repayment value every year.
Tariffs? Yes, they are bad economically. But US consumers, not those in targeted nations, will chiefly pay them. Tariffs always hurt the imposing country most. They temporarily skew demand, boosting select categories as businesses and consumers front-run new US taxes on imports.
But tariffs on select items differ from inflation. There is always a churn in prices of select goods or services, which simply governs supply and demand imbalances. Inflation is a broad price increase across the entire economy. It is too much money chasing too few goods and services. Only central banks cause true inflation.
Consider this: During 2020’s Covid chaos, monetary officials inexplicably and bizarrely ballooned money supply. The Eurozone boosted M3 nearly 13 per cent year on year in February 2021. The UK spiked M4 more: 15.2 per cent year on year in the same month. US M4 boomed 30.9 per cent year on year in June 2020. Later, prices galloped – keeping with the monetarist theory that policymakers broadly ignored.
What about now? In September, Eurozone M3 rose 2.8 per cent year on year. US and UK M4 rose 4.5 and 4.2 per cent year on year, respectively, in August. These figures are in line with the low-inflation, pre-pandemic years. They provide minimal fuel to reignite the inflation war.
Tariffs do not affect money supply. They may make some prices rise – mainly unique products people depend on, like generic medications – restricting consumer budgets and, thus, forcing down prices of other, potentially substituted products. Remember US President Donald Trump’s much-hyped first-term tariffs? American inflation never even reached 3 per cent year on year.
Contrary to popular perception, 2025’s US tariffs are not “universal”. Exemptions abound. Companies find ways – legally and illegally – to dodge others. Global prices will see only indirect, temporary effects from all this.
Fighting the last war will not give you an investing edge. Market forecasting requires seeing something big that others do not – and false global inflation fears do not count. Fear of a false factor is always bullish. So, stay bullish.
How to apply for a drone permit
- Individuals must register on UAE Drone app or website using their UAE Pass
- Add all their personal details, including name, nationality, passport number, Emiratis ID, email and phone number
- Upload the training certificate from a centre accredited by the GCAA
- Submit their request
What are the regulations?
- Fly it within visual line of sight
- Never over populated areas
- Ensure maximum flying height of 400 feet (122 metres) above ground level is not crossed
- Users must avoid flying over restricted areas listed on the UAE Drone app
- Only fly the drone during the day, and never at night
- Should have a live feed of the drone flight
- Drones must weigh 5 kg or less
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The Sky Is Pink
Director: Shonali Bose
Cast: Priyanka Chopra Jonas, Farhan Akhtar, Zaira Wasim, Rohit Saraf
Three stars
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Barbie
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Living in...
This article is part of a guide on where to live in the UAE. Our reporters will profile some of the country’s most desirable districts, provide an estimate of rental prices and introduce you to some of the residents who call each area home.
US PGA Championship in numbers
1 Joost Luiten produced a memorable hole in one at the par-three fourth in the first round.
2 To date, the only two players to win the PGA Championship after winning the week before are Rory McIlroy (2014 WGC-Bridgestone Invitational) and Tiger Woods (2007, WGC-Bridgestone Invitational). Hideki Matsuyama or Chris Stroud could have made it three.
3 Number of seasons without a major for McIlroy, who finished in a tie for 22nd.
4 Louis Oosthuizen has now finished second in all four of the game's major championships.
5 In the fifth hole of the final round, McIlroy holed his longest putt of the week - from 16ft 8in - for birdie.
6 For the sixth successive year, play was disrupted by bad weather with a delay of one hour and 43 minutes on Friday.
7 Seven under par (64) was the best round of the week, shot by Matsuyama and Francesco Molinari on Day 2.
8 Number of shots taken by Jason Day on the 18th hole in round three after a risky recovery shot backfired.
9 Jon Rahm's age in months the last time Phil Mickelson missed the cut in the US PGA, in 1995.
10 Jimmy Walker's opening round as defending champion was a 10-over-par 81.
11 The par-four 11th coincidentally ranked as the 11th hardest hole overall with a scoring average of 4.192.
12 Paul Casey was a combined 12 under par for his first round in this year's majors.
13 The average world ranking of the last 13 PGA winners before this week was 25. Kevin Kisner began the week ranked 25th.
14 The world ranking of Justin Thomas before his victory.
15 Of the top 15 players after 54 holes, only Oosthuizen had previously won a major.
16 The par-four 16th marks the start of Quail Hollow's so-called "Green Mile" of finishing holes, some of the toughest in golf.
17 The first round scoring average of the last 17 major champions was 67.2. Kisner and Thorbjorn Olesen shot 67 on day one at Quail Hollow.
18 For the first time in 18 majors, the eventual winner was over par after round one (Thomas shot 73).
Fresh faces in UAE side
Khalifa Mubarak (24) An accomplished centre-back, the Al Nasr defender’s progress has been hampered in the past by injury. With not many options in central defence, he would bolster what can be a problem area.
Ali Salmeen (22) Has been superb at the heart of Al Wasl’s midfield these past two seasons, with the Dubai club flourishing under manager Rodolfo Arrubarrena. Would add workrate and composure to the centre of the park.
Mohammed Jamal (23) Enjoyed a stellar 2016/17 Arabian Gulf League campaign, proving integral to Al Jazira as the capital club sealed the championship for only a second time. A tenacious and disciplined central midfielder.
Khalfan Mubarak (22) One of the most exciting players in the UAE, the Al Jazira playmaker has been likened in style to Omar Abdulrahman. Has minimal international experience already, but there should be much more to come.
Jassim Yaqoub (20) Another incredibly exciting prospect, the Al Nasr winger is becoming a regular contributor at club level. Pacey, direct and with an eye for goal, he would provide the team’s attack an extra dimension.
Killing of Qassem Suleimani
'Top Gun: Maverick'
Rating: 4/5
Directed by: Joseph Kosinski
Starring: Tom Cruise, Val Kilmer, Jennifer Connelly, Jon Hamm, Miles Teller, Glen Powell, Ed Harris
Where to buy art books in the UAE
There are a number of speciality art bookshops in the UAE.
In Dubai, The Lighthouse at Dubai Design District has a wonderfully curated selection of art and design books. Alserkal Avenue runs a pop-up shop at their A4 space, and host the art-book fair Fully Booked during Art Week in March. The Third Line, also in Alserkal Avenue, has a strong book-publishing arm and sells copies at its gallery. Kinokuniya, at Dubai Mall, has some good offerings within its broad selection, and you never know what you will find at the House of Prose in Jumeirah. Finally, all of Gulf Photo Plus’s photo books are available for sale at their show.
In Abu Dhabi, Louvre Abu Dhabi has a beautiful selection of catalogues and art books, and Magrudy’s – across the Emirates, but particularly at their NYU Abu Dhabi site – has a great selection in art, fiction and cultural theory.
In Sharjah, the Sharjah Art Museum sells catalogues and art books at its museum shop, and the Sharjah Art Foundation has a bookshop that offers reads on art, theory and cultural history.
MATCH INFO
Newcastle United 2 (Willems 25', Shelvey 88')
Manchester City 2 (Sterling 22', De Bruyne 82')
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Washmen Profile
Date Started: May 2015
Founders: Rami Shaar and Jad Halaoui
Based: Dubai, UAE
Sector: Laundry
Employees: 170
Funding: about $8m
Funders: Addventure, B&Y Partners, Clara Ventures, Cedar Mundi Partners, Henkel Ventures
Cry Macho
Director: Clint Eastwood
Stars: Clint Eastwood, Dwight Yoakam
Rating:**
The specs
Engine: 2.9-litre, V6 twin-turbo
Transmission: seven-speed PDK dual clutch automatic
Power: 375bhp
Torque: 520Nm
Price: Dh332,800
On sale: now
Labour dispute
The insured employee may still file an ILOE claim even if a labour dispute is ongoing post termination, but the insurer may suspend or reject payment, until the courts resolve the dispute, especially if the reason for termination is contested. The outcome of the labour court proceedings can directly affect eligibility.
- Abdullah Ishnaneh, Partner, BSA Law
COMPANY PROFILE
Name: Kumulus Water
Started: 2021
Founders: Iheb Triki and Mohamed Ali Abid
Based: Tunisia
Sector: Water technology
Number of staff: 22
Investment raised: $4 million
UAE currency: the story behind the money in your pockets
