Looking at the US, the unhappy story of inflation is still far from over | Nils Pratley

A fall in oil prices is small consolation - even ignoring fuel and food, US inflation is running at 6%

Chapter one in the inflation story was central banks' failure to recognise the threat as they spent most of 2021 warbling about supply-chain shocks and transitory" factors. Chapter two was the belated realisation that action was needed, followed by several yanks on the interest rate lever. Chapter three - scheduled to arrive about now - was supposed to be firm signs that the inflationary peak is in sight.

We're not there yet. The shocker from the US on Wednesday was an inflation reading of 9.1% in June, a couple of notches higher than markets and economists had forecast. The US Federal Reserve's promise-cum-threat to hike rates by 0.75% at the end of this month, after a similar move last month, now looks nailed on to be delivered in full. Cue another discomforting rise in the dollar, causing the euro to dip below parity for the first time since 2002.