It’s an intuitively appealing and somewhat alarming thesis. The globalisation of the past 30-odd years pushed down inflation across the world, as cheap imports from China cut the cost of clothes, toys and electronics to rich-country consumers. But the geopolitical fracturing of the world economy is now putting all that at risk. Christine Lagarde, European Central Bank president, warned in April that an escalation of US-China tensions could damage value chains and push global consumer prices up by 5 per cent.
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