London | 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 cheques to deal with the cost-of-living squeeze, undermining the inflation fight even further.

Bloomberg