Is Inflation The Main Risk To Economic Growth? by Lloyds TSB

Bank of England warns, people listen but inflation over the next two years is now largely out of its control…

Sometimes it takes the central bank to speak in order to get people to take notice of events that others might also have spotted but the majority have missed. So it was with the latest Quarterly Inflation Report (QIR) from the Bank of England.

Bank of England warns, people listen but inflation over the next two years is now largely out of its control…

Sometimes it takes the central bank to speak in order to get people to take notice of events that others might also have spotted but the majority have missed. So it was with the latest Quarterly Inflation Report (QIR) from the Bank of England. A few observers had been warning that the main risk facing the economy was not the credit crunch, important though that is, but rising price inflation. This reasoning was based on a view that the credit crisis had mainly hit the developed markets and within them those with firms that had been most heavily involved in securitised products. But outside of these firms – the credit derivatives part of the financial markets and those closely related to it, including the housing market – other sectors were not doing too badly.

Read Full Report