<p>The recent inflation surge is most likely a "temporary" phenomenon, the Bank for International Settlements said Tuesday.</p>.<p>The BIS, dubbed the central bank of central banks, has worked up several scenarios to assess the challenges facing banks emerging from the coronavirus crisis.</p>.<p>"As of today, we at the BIS consider that it will most likely be temporary," general manager Agustin Carstens said of the inflation rise during a speech at the institution's annual general meeting.</p>.<p>The acceleration of inflation is linked to one-off effects, he said, including the rebound in commodity prices and tight supplies due to the rapid recovery which "should dissipate reasonably quickly".</p>.<p>In May, consumer prices jumped five percent in the United States -- their largest increase in nearly 13 years -- and two percent in the eurozone: the upper limit of the target set by the European Central Bank, raising concerns among investors.</p>.<p>If the BIS sees it as a temporary phenomenon, the Swiss-based institution has nonetheless considered two other scenarios in order to assess the challenges that central banks will face in recovering from the Covid-19 pandemic.</p>.<p>While its base scenario is based on the idea of a relatively smooth economic recovery, the second scenario envisages a more marked acceleration than expected, under the effect of stimulus plans and a strong rebound in consumption.</p>.<p>Central banks would then risk having to tighten their monetary policies earlier than expected.</p>.<p>Thanks to vast interventions, coupled with broad government plans to support the economy, "disaster was averted, and the global economy bounced back more quickly than expected", Carstens said.</p>.<p>However, the crisis is not over, as the recovery is "highly uneven and incomplete, and the global outlook is uncertain".</p>.<p>The major long-term challenge for central banks will be to restore their leeway so that they can once again help the economy in future in the event of a recession or another unforeseen crisis.</p>.<p>Economists and policymakers have been at pains to stress that recent inflation surges in Europe and the United States are likely to be transitory, driven mainly by one-off effects linked to post-lockdown reopenings and supply chain bottlenecks.</p>.<p>Established in Basel in 1930, the BIS is owned by 62 central banks, representing countries that account for about 95 percent of global gross domestic product (GDP).</p>
<p>The recent inflation surge is most likely a "temporary" phenomenon, the Bank for International Settlements said Tuesday.</p>.<p>The BIS, dubbed the central bank of central banks, has worked up several scenarios to assess the challenges facing banks emerging from the coronavirus crisis.</p>.<p>"As of today, we at the BIS consider that it will most likely be temporary," general manager Agustin Carstens said of the inflation rise during a speech at the institution's annual general meeting.</p>.<p>The acceleration of inflation is linked to one-off effects, he said, including the rebound in commodity prices and tight supplies due to the rapid recovery which "should dissipate reasonably quickly".</p>.<p>In May, consumer prices jumped five percent in the United States -- their largest increase in nearly 13 years -- and two percent in the eurozone: the upper limit of the target set by the European Central Bank, raising concerns among investors.</p>.<p>If the BIS sees it as a temporary phenomenon, the Swiss-based institution has nonetheless considered two other scenarios in order to assess the challenges that central banks will face in recovering from the Covid-19 pandemic.</p>.<p>While its base scenario is based on the idea of a relatively smooth economic recovery, the second scenario envisages a more marked acceleration than expected, under the effect of stimulus plans and a strong rebound in consumption.</p>.<p>Central banks would then risk having to tighten their monetary policies earlier than expected.</p>.<p>Thanks to vast interventions, coupled with broad government plans to support the economy, "disaster was averted, and the global economy bounced back more quickly than expected", Carstens said.</p>.<p>However, the crisis is not over, as the recovery is "highly uneven and incomplete, and the global outlook is uncertain".</p>.<p>The major long-term challenge for central banks will be to restore their leeway so that they can once again help the economy in future in the event of a recession or another unforeseen crisis.</p>.<p>Economists and policymakers have been at pains to stress that recent inflation surges in Europe and the United States are likely to be transitory, driven mainly by one-off effects linked to post-lockdown reopenings and supply chain bottlenecks.</p>.<p>Established in Basel in 1930, the BIS is owned by 62 central banks, representing countries that account for about 95 percent of global gross domestic product (GDP).</p>