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UK inflation to hit 3.9% in early 2022, NIESR forecasts | Hellenic Shipping News Worldwide


UK inflation to hit 3.9% in early 2022, NIESR forecasts
British consumer price inflation will reach 3.9% early next year, almost double the Bank of England’s target, but should fall back to 2% the year after if the BoE begins to raise interest rates, a leading think tank forecast on Monday.
The National Institute of Economic and Social Research (NIESR) also revised up its growth forecast for 2021 by 1.1 percentage points to 6.8% – broadly in with the most recent forecasts from the BoE and the International Monetary Fund.
After suffering its biggest economic slump in over 300 years in 2020 due to the coronavirus pandemic, Britain’s economy has been recovering rapidly this year. ....

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The fear that haunts markets – is inflation coming back?


At the beginning of last week, stock markets panicked when figures suggested US inflation had already started to take off, adding to concerns that it could take hold in the UK. By the time markets closed on Friday, the panic seemed to have abated and stocks had risen. But the debate on whether inflation will take root around the world has begun. What is the likely way ahead?
Why inflation might increase
A surge in consumer spending UK households have saved about £160bn over the past 14 months, according to the National Institute of Economic and Social Research (NIESR). As much as 20% of that could be spent before the end of the year, says the Bank of England’s chief economist, Andy Haldane. ....

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