Inflation & Prices
Rents Set to Be Last Domino to Fall in Global Inflation Battle
- Immigration and housing shortages fuel rents in Australia, UK
- Sticky inflation prevents central banks from cutting rates
From a year ago, rent inflation rose 7.7% in the first three months of 2024, remaining around the highest in the 30 years the RBA has been targeting inflation.
Photographer: Carla Gottgens/BloombergThis article is for subscribers only.
Surging rents across many developed economies are proving to be a stubborn hurdle for central banks as they struggle to nail down inflation once and for all this tightening cycle.
In the US, UK, Canada and Australia, rapidly rising housing costs — which have a hefty weighting in consumer price index baskets — are preventing inflation from declining closer to central banks’ targeted levels. The danger is that workers will demand even fatter pay checks to deal with the cost-of-living squeeze, undermining the inflation fight even further.