THE "case of the missing inflation" or (more prosaically) the virtual disappearance of price rises might be termed one of the great mysteries of our time.

While various people claim to have solved this puzzle, it still defies any single, satisfactory explanation. Sherlock Holmes once advised his partner Dr Watson: "Eliminate all that is impossible and whatever remains, however improbable, must be the truth." But the trouble with applying this to the case of absent inflation is that few possibilities can safely be excluded.

"One of the biggest puzzles since the global financial crisis is how low inflation has remained, even as slack in the US has been used up," notes the Institute of International Finance (IIF), adding that US core inflation fell to 1.5 per cent in April from 1.8 per cent in February.