Monday, July 6, 2009
Imagined dangers can be as pernicious as real ones.
'In an economic environment fraught with uncertainty, we can be certain of two things: that this emerging inflation scare will become steadily more strident as the recovery takes firmer hold; and that the ensuing panic will prove to be a false alarm'. 'By next year, though, both inflation measures will unavoidably begin to climb as the past falls in energy costs and interest rates drop out of the sums. Adding to the upward pressure will be increases in VAT and petrol duty, which will add about 1.5 percentage points to inflation rates next year'.