Is the global wave of interest rate hikes far from over? High inflation may persist into next year.

Rising energy costs may trigger broader and more persistent price hikes across the globe. A latest professional survey shows that high inflation could last until 2027 and sweep across most parts of the global economy.

Reuters' survey of economists conducted in October shows that among the 50 covered economies, 31 have had their inflation expectations for next year revised upward, including 15 out of 21 developed economies. In addition, they also raised growth forecasts for 23 economies, indicating that sustained inflation may be accompanied by stronger-than-expected economic activities.

The research findings indicate that the market situation is somewhat different from the results of Reuters' surveys in April and July, which painted a picture of high inflation paired with slowing growth. Analysts believe that investments in the artificial intelligence sector and better-than-expected economic activities in multiple regions have propped up economic growth to a certain extent, even though households are still struggling with the cost of living.

This resilience has also fueled concerns that price pressures may be difficult to rein in.

"I am once again very worried about inflation," Janet Henry, Global Chief Economist at HSBC, told the media.

Henry said, the longer the Middle East conflict lasts and the more it escalates, the wider the spread of price pressures will be, and the greater the possibility that inflation will remain persistently high.

Oil prices have long been a major source of pressure. Since October 7, crude oil prices have stayed above 100 US dollars per barrel, and even broke through 117 US dollars last week, hitting a new high in six months. Since the outbreak of the Iran war nearly eight months ago, oil prices have risen by more than 60%.

Seth Carpenter, Global Chief Economist at Morgan Stanley, pointed out in a report that the impact of rising energy prices is continuously spreading across the global economy. He added that there are signs that the rise in energy costs is starting to be reflected in core inflation indicators, which usually exclude the highly volatile food and energy prices.

Surveys conducted by Reuters over the past three quarters show that economists have raised the median inflation expectation for 2027 by a cumulative 0.7 percentage points, with a 0.5 percentage point upward revision for the UK and 0.2 percentage points for the Eurozone. India's inflation expectation was revised up by 0.4 percentage points, and Brazil's by 0.5 percentage points.

Analysts pointed out that most central banks around the world have only raised interest rates several times, or have kept interest rates unchanged. Therefore, if inflation spreads further, more interest rate hikes may come in the future, which will push up the borrowing costs for households and enterprises.

In recent months, the global bond market has suffered a sell-off, with yields rising sharply and financial conditions tightening. Rising bond yields affect borrowing costs across the entire economy.

Despite inflation concerns, economists are more optimistic about the economic growth outlook. They currently expect the global economy to grow by 3% in 2026 and 3.2% in 2027, higher than the 2.9% and 3.1% predicted in the July survey. However, the 2027 forecast is still lower than the 3.4% predicted by the International Monetary Fund.

This article is from the WeChat Official Account "CLS", author: Huang Junzhi, published by 36Kr with authorization.