Inflation has taken wings. The cost of living across the Organization for Economic Cooperation and Development — a group of major economies that includes the United States and much of Europe — increased 9.6% between May 2021 and June 2022. The outlook is just as grim in developing countries. Economists now fear the rising numbers may augur a global economic slump.

A worrying trend: Inflation has steadily risen since early 2021. In the U.S. and Britain, it has reached levels last seen four decades ago. The OECD’s inflation forecast for its member countries projects the cost of living will rise slightly before beginning to taper off at the end of the year.

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Tighten your belts: Citing concerns over inflation, among other factors such as the war in Ukraine, the International Monetary Fund released a gloomy economic forecast. The institution projects global gross domestic product for 2022 to contract to 3.2%, a near-half drop since 2021.

  • The European Union agreed Tuesday to curb natural gas consumption by 15% to save for winter. European countries are facing shortages due to conflict with Russia, a key supplier of gas, over the war in Ukraine.
  • The Federal Reserve, America’s central banking system, raised interest rates by 0.75% Wednesday, an effort to lower prices by dampening demand. 
  • At least 18 states have decided to send relief payments to Americans, reports Business Insider, although economists worry the subsidies may instead feed demand.

Key quote: “The world may soon be teetering on the edge of a global recession, only two years after the last one,” wrote Pierre-Olivier Gourinchas, economic counselor and director of research at IMF.