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Mark Carney, Governor of the Bank of Canada, holds a press conference to discuss the contents of the Monetary Policy Report at the National Press Theatre in Ottawa on Wednesday, October 26, 2011.Sean Kilpatrick

Christine Lagarde, head of the International Monetary Fund, last week sharpened her warnings about the global economy, saying it is in a "dangerous phase" and urging policy makers in rich countries and emerging markets to co-ordinate their efforts or the world could face a "lost decade."

Little wonder, then, that central banks have put inflation fighting on ice as they do all they can to secure the recovery. Here are some of the inflation dynamics at play around the world:

NORTH AMERICA

On Friday, Statistics Canada is expected to say the annual inflation rate pulled back to about 2.7 per cent in October, after reaching 3.2 per cent in September. The core rate, a gauge that strips out eight volatile items such as gasoline and some fresh foods, is expected to have dropped to 1.9 per cent from September's 2.2 per cent, which was the highest in almost three years. That will be good news for the Bank of Canada, which has kept interest rates at near-emergency levels since the fall of 2010 even though inflation has been above Governor Mark Carney's 2-per-cent target for 10 consecutive months.

U.S. inflation data come out on Tuesday and Wednesday, and while both headline and core inflation are still expected to be higher than the Federal Reserve Board would like, it seems a safe bet that price pressures will ease over the next year as global demand slows and the U.S. job market remains far too weak to push up wages, the No. 1 expense for most companies.

EURO ZONE, U.K.

Mario Draghi, new head of the European Central Bank, made a splash at his first policy meeting this month, reversing an interest-rate hike by his predecessor and signalling that the ECB will no longer be accused of squeezing the region's economy by keeping borrowing costs too high, for too long. The move risks fuelling faster-than-expected inflation, but with the euro zone's debt crisis pushing the region into a recession that analysts say could last a year or longer, Mr. Draghi looks to be putting his eggs in the right basket. According to professional forecasters that the ECB surveys as it sets policy, euro-zone inflation will slow to 1.8 per cent in 2012 from 2.6 per cent this year.

The Bank of England has grappled with extremely weak growth and unusually high, commodity-fuelled inflation. This week it publishes new inflation forecasts that could pave the way for further stimulus. Consumer-price growth in the U.K. accelerated to 5.2 per cent in September, more than twice the bank's target, but policy makers anticipate it will cool significantly in 2012 and reports from British retailers suggest it is slowing quite a bit already.

ASIA, EMERGING MARKETS

Policy makers from China to Brazil have cut borrowing costs in recent months, or refrained from raising them, as growth worries outweigh inflation fears. The Bank of Korea last week put its inflation-fighting efforts on hold and signalled it will take no action until the European situation stabilizes. China's efforts to tame price increases and prevent a property bubble in the world's fastest-growing economy appear to be paying off. Now that the export-dependent country faces the prospect of a long slump in Europe, its biggest trading partner, the next policy move will likely be to loosen the flow of credit. Meanwhile, India is exhibiting the risks of aggressive inflation fighting: Industrial output grew at the slowest pace in two years in September, as the effects of 13 consecutive interest-rate hikes and the global slowdown combined to squeeze manufacturing.

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