The war in Ukraine is casting a stagflationary shadow over the world economy and posing a dilemma for central banks: Should they support flagging growth or fight skyrocketing inflation?

Central bankers—who were already struggling to predict when surging inflation would come under control—say the war has deepened the uncertainty they face as they seek to rein in price increases without killing the recovery from the pandemic. They face the risk of having to squeeze their economies hard and drive up unemployment to get inflation in check.