Signs of normalisation

This week’s weaker-than-expected US inflation data coupled with tentative evidence suggesting that labour market activity may be cooling have driven soft landing scenarios into the ascendancy once again. With this in mind our charts this week home in on the following themes:

·       The decoupling of the global growth consensus

·       The decoupling of the inflation consensus

·       The importance of energy prices

·       The slowdown in the UK labour market

·       Still-low estimates of r-star in major economies

·       Still-high estimates of output gaps in major economies