Global Inflation Could Remain High Until 2027 as Energy Costs Rise, Reuters Survey Finds
— 500+ economists, one worry: expensive oil is feeding through to everything
October 28, 2026: Inflation could remain higher than expected across much of the world into 2027, as rising energy costs threaten to push up prices for households and businesses, according to a Reuters poll of more than 500 economists.
The survey found that economists have raised their inflation forecasts for many economies, even as expectations for global economic growth have improved. The combination presents a challenge for central banks, which must control rising prices without unnecessarily slowing economic activity.
Rising Oil Prices Put Pressure on the Global Economy
Oil prices have remained above $100 a barrel since October 7, according to the Reuters report. Prices have risen by more than 60% since the US-Israeli war with Iran began.
Higher oil prices can affect far more than the cost of petrol. Businesses rely on energy to manufacture products, transport goods and operate factories. When fuel and electricity costs increase, companies may raise prices to protect their profit margins.
Airlines, shipping companies, manufacturers and agricultural businesses can be particularly exposed to higher energy costs. Farmers may also face increased expenses for fuel, fertilisers and transporting crops to market.
If these costs remain elevated, the impact could spread across the economy and make everyday goods more expensive.
Economists Raise Inflation Forecasts
The Reuters survey found that economists increased their 2027 inflation forecasts for 31 of the 50 economies covered.
Among developed economies, forecasts were raised for 15 of the 21 countries included in the survey. Britain and the euro zone recorded some of the largest cumulative upward revisions.
These changes suggest that economists are becoming more concerned about the possibility that higher energy prices will feed into broader inflation.
The impact will vary between countries. Economies that depend heavily on imported energy may face greater pressure, while energy-producing countries could benefit from higher export revenues. However, even energy exporters can experience higher domestic costs.
- 31 of 50 economies: 2027 inflation forecasts raised, per the Reuters poll.
- 15 of 21 developed economies: forecasts revised upward.
- Britain & euro zone: among the largest cumulative upward revisions.
- Oil above $100: crude has held above that level since October 7.
- Up over 60%: oil's rise since the US-Israeli war with Iran began.
Central Banks Face a Difficult Decision
Central banks generally raise interest rates when inflation remains too high. Higher borrowing costs can reduce demand by making loans, mortgages and business investment more expensive.
But increasing interest rates also carries risks. Households may cut spending, businesses may postpone expansion and economic growth may weaken.
Central banks therefore face a difficult decision if energy prices continue to rise while economic activity remains relatively strong.
Some policymakers may prefer to wait for clearer evidence that higher energy costs are spreading into other prices. Others could come under pressure to act if inflation expectations begin to rise. The timing of any interest-rate changes will depend on incoming economic data and the decisions of individual central banks.
Global Growth Forecasts Have Improved
The outlook is not entirely negative. The Reuters poll found that economists had upgraded their global growth forecasts to 3.0% for 2026 and 3.2% for 2027.
Resilient economic activity and large investments in artificial intelligence have helped support expectations for growth. However, stronger demand can also make inflation harder to control when energy and other production costs are increasing.
This creates a complicated situation for policymakers: economic growth may remain solid even as consumers face pressure from rising prices.
The survey also suggests that the inflation outlook has become more uncertain. If energy prices remain high for an extended period, businesses could pass more costs on to consumers. If prices fall, some of the pressure could ease.
What Higher Inflation Means for Households
For households, persistent inflation means that the cost of living may continue to rise even if the pace of price increases is slower than during previous inflationary periods.
Families could face higher transport bills, heating costs and prices for goods delivered over long distances. Businesses may also delay hiring or investment if operating expenses continue to increase.
The effects will not be equal everywhere. Countries with stronger social support systems, domestic energy supplies or lower exposure to imported fuel may be better placed to manage the pressure.
For consumers, the key issue is whether wages rise quickly enough to keep pace with the cost of essential goods and services.
What Happens Next?
Investors, businesses and policymakers will be watching oil prices, inflation data and central-bank decisions in the coming months.
A sustained fall in energy prices could ease inflationary pressure. But if oil remains expensive and higher costs spread through supply chains, central banks may face a longer period of difficult policy decisions.
The Reuters survey does not guarantee that inflation will follow this path. It reflects economists' current expectations, which can change as geopolitical events and economic conditions develop.