While historically only very large firms issued in the European corporate bond market, recent years have seen the entry of many new players: small, private, and unrated issuers. Firm-level data show these new players face different game dynamics. They are disconnected from aggregate market movements and still depend heavily on banks. This means hey could potentially affect financial stability and be less responsive to policy interventions.

Headline inflation has increased markedly across both advanced and emerging market (EM) economies this year ending up much higher than we forecast six months ago. Consumer price inflation is expected to remain elevated until at least the second quarter of 2022 as ongoing supply chain disruptions, higher energy prices, and stronger-than-expected demand in countries such as the US provide additional impetus to already buoyant goods prices. Nowhere is this clearer than in Brazil, where annual inflation rose to 10.67 per cent in October, the highest rate since January 2016.

CPI Inflation rose to 4.2% from the previous months 3.1%, slightly higher than we had expected. The anticipated twin effects of the increase in the OFGEM price cap and an increase in the VAT rate on hospitality (partially reversing the July 2020 reduction) both impacted the figure as did surging petrol and diesel prices. Since there was a base effect of 0% dropping out from September 2020, all the change in headline inflation in October arises  from the new inflation in the month September to October 2021 which represents the largest month on month increase since April 1993.

In a previous blog, we wrote about the importance of establishing an evidence base for interventions and identified funding as a key issue.  This has been exacerbated by the COVID-19 pandemic.  How can services provide the best possible evidence-based interventions if the funding for service delivery and evaluation is not available?