UK: Inflation Trend Is Not a Friend
128 Views, 20 Jan 2022 02:25
- 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.