UK must not fall for the false promise of higher inflation
Posted on June 3rd, 2010
And inflation according to the Retail Prices Index (RPI) – which has a longer track record – came in even higher at 5.3pc. So does the UK have an inflation problem? And should the Monetary Policy Committee (MPC) be doing more about it?
Inflation has certainly turned out higher than we expected this time last year. In the forecasts we prepared back then, we thought CPI inflation was most likely to come in at around 0.75pc over the subsequent year. And we thought that the odds of inflation exceeding 3pc were only about one in 15. But we were by no means alone. In a survey of City and academic forecasters conducted at the same time, the average odds on inflation exceeding 3pc was even lower at one in 20.
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Tags: Higher Inflation, Inflation
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