How high? - Financial indicator
July 2008
UK consumers believe the inflation rate is 5 per cent rather than the 3 per cent shown by official statistics...
Expectations are important because they set the point at which pay settlements are considered ‘fair’ and so raise the spectre of more industrial unrest in the months ahead. The Bank of England will do what it can to change perceptions, by threats of higher interest rates and by actual increases. Increased borrowing costs will exacerbate the squeeze, reducing the ability to give and raising the demand for support.
Author: John Kelly
John Kelly is head of client investment at CCLA.
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