United Kingdom

UK: Inflation Trend Is Not a Friend

Macroeconomics
128 Views, 20 Jan 2022 02:25
EXECUTIVE SUMMARY
  • Another month of substantial upside inflation pressure creates broad-based income destruction. What started as base effects and built with narrow shocks (inc-energy) has increasingly become an awkward trend phenomenon. 
  • That painful trend could continue causing upside inflation surprises until the brisk nominal expansion burns itself out. Second-round effects of inflation in wages are needed to extend it.
  • The BoE is likely to do its bit by hiking again on 3 February. 
detail (9-minute read)
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Phil Rush
Chief Economist
Heteronomics
United KingdomMulti-AssetMacroeconomicsCross Asset Strategy

Philip Rush is the Founder and Chief Economist of Heteronomics. Until launching in November 2016, he was Nomura's Senior... 

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