The annual rate of inflation in developed economies continued to rise as 2010 began, driven by higher energy prices.
The Organization for Economic Cooperation and Development said Tuesday consumer prices among its 30 members rose 2.1% in the 12 months to January, compared with a 1.9% increase in the 12 months to December.
Between June and September 2009, developed economies experienced their first collective episode of deflation since the OECD began compiling data in 1971, a testament to the severity of the global financial crisis and the recession it engendered.
But the return of inflation is unlikely to lead to an immediate response from the world's leading central banks, which are likely to keep their key interest rates close to record lows for many months to come.
That is because there is no sign of the emergence of a strong, broad-based increase in prices.
Falling energy prices were the main driver behind the developed world's brush with deflation, and rising energy prices have been responsible for the return to inflation.
In the 12 months to January, energy prices rose 10.6%, having risen 8.5% in the 12 months to December. In the U.S., energy prices were 19.1% higher from a year earlier.
Throughout the period of deflation, prices of goods and services other than energy and food, continued to rise. But there is no sign they are rising at a more rapid pace. Indeed, the core rate of inflation—which excludes very volatile items such as energy and food—was unchanged at 1.6%.
Some smaller central banks have already begun to increase their key interest rates in anticipation of rising inflationary pressures as the global economy recovers, including the Reserve Bank of Australia, the Bank of Israel and Norway's Norges Bank.
A small number of OECD members continued to experience deflation in January, including Finland, Ireland and Japan.