The Ukraine war intensifies the dilemma facing monetary policymakers by simultaneously harming growth and exacerbating already high inflation

Russia’s war in Ukraine, in addition to being a human tragedy, represents a challenge for the global economy. It calls into question monetary policymakers’ strategy since it will simultaneously harm growth and put upward pressure on inflation when inflation is already high due to the pandemic. Based on estimates from the National Institute of Economic and Social Research (NIESR), Corrado Macchiarelli gives an account of what the conflict means for inflation and the challenges it poses for monetary policymakers, including in the UK.