Trade forecast down, food prices up: the economic stories to read this week

US consumer prices increased by 8.5% in March from a year earlier, putting inflation at its highest level since 1981. The month-on-month increase of 1.2% was the biggest gain since 2005, with gasoline costs driving half of the rise.

The US joined other economies in seeing rapidly rising inflation. In the UK, annual inflation hit 7% last month – a 30-year high – with prices rising by 1.1% in March alone.

Inflation also appears to be rising across Asia. Readings in China, India, Indonesia, the Philippines, Thailand and South Korea have all recently risen more than forecast. New Zealand has raised interest rates over price increase concerns.

Argentina's central bank has raised its key rate to 47% – its fourth increase in interest rates this year – as inflation hits a 20-year high.

Recession risks are rising, with the global economy set to take a step back in 2022, according to the Peterson Institute for International Economics.

The main processor for US securities transactions – the Depository Trust & Clearing Corporation – has launched an experiment to measure the potential benefits of a US central bank digital currency.

The World Bank says Ukraine's economy will contract by 45% this year because of the Russian invasion. Russia's economy is set to shrink by 11.2%, it adds.

As rising food and energy prices hit poorer countries, better mechanisms for dealing with sovereign debt stress will be needed to stave off defaults, the International Monetary Fund has warned.

Global sustainable bond issuance slowed faster than the broader market in the first quarter, Reuters reports. It puts the deceleration down to a surge in market volatility after Russia invaded Ukraine and to tightening monetary policy around the world.

Economists at the World Trade Organization (WTO) have reassessed their projections for world trade over the next two years in light of the war in Ukraine.

The WTO now expects 3.0% growth this year in merchandise trade volume – a term covering imports and exports – down from its previous forecast of 4.7%. It then expects 3.4% growth next year. However, it warns that these estimates are "less certain than usual due to the fluid nature of the conflict".

COVID-19 lockdowns in China are also weighing on global trade, the WTO said.

"The war in Ukraine has created immense human suffering, but it has also damaged the global economy at a critical juncture. Its impact will be felt around the world, particularly in low-income countries, where food accounts for a large fraction of household spending," Director-General Ngozi Okonjo-Iweala said.

World food commodity prices jumped to record highs in March, according to the Food and Agriculture Organization of the United Nations (FAO).

The FAO Food Price Index averaged 159.3 points in March. This was up by 12.6% from February, when it had already reached its highest level since the index started in 1990. The index tracks monthly changes in the international prices of a basket of commonly traded food commodities.

The Cereal Price Index, Vegetable Oil Price Index and Sugar Price Index all increased, with the Vegetable Oil Index up 23.2%.

Optimism among fund managers over global economic growth has hit an all-time low, a survey by investment bank BoFA Securities has found.

This VoxEU column uses historical data to find that indicators in the US suggest a "very high probability of recession over the next two years".

Research in NBER Digest looks at the tightness of the US labour market in the latter stages of the COVID-19 pandemic.