Interest rates will come down sharply in 2025

By Archie Hall, Britain economics correspondent, The Economist

Bumpily and with a few shudders, central bankers made the landing in 2024. The grim predictions that only deep recessions could pull sky-high inflation back down to earth proved misplaced. Instead, a sharp increase in interest rates, supply-side improvements and the passage of time did the job well enough. Inflation is at or near 2% across the rich world and, barring trade wars or other shocks, should stay low. The economic news in most rich countries is fairly sunny. Growth varies from strong to mediocre, but at least is not negative. Share prices are still higher than ever. Unemployment is just above all-time lows.