Summary

• While global oil prices have fallen this past week, the knock-on inflationary impact from a sustained period of elevated energy prices means that central banks will need to be on high alert.
• PMI survey data are capable of picking up inflation signals in a timely manner, with contributing companies providing real-time feedback on changes in their prices and the factors underpinning them.
• The ECB’s stronger aversion to inflation, relative to the BoE and Fed, largely explains why our modelling had the ECB as the most likely to tighten policy in June.

In previous research, we demonstrated how Purchasing Managers’ Index^TM (PMI^®) data from S&P Global can be used to calculate the likelihood of changes in monetary policy. These PMI-powered probability models showed