With inflation continuing to surprise on the upside, our central scenario assumes there has been some slippage in inflation expectations, leading to second-round effects on wages and prices As a result, inflation in our central scenario, which we label ‘Extended transitory’ (70% weight), remains higher for longer than we forecast in December, and policy rates rise by more In our first risk scenario, which we label ‘Back to the 70s’ (30% weight), wage-price spirals re-emerge, and inflation dynamics briefly mirror…