According to the National Bureau of Statistics, the inflation rate has risen again. Prices in March rose by 0.7% year-on-year, while prices in February rose by 0.4%. Since then, the driving factor has been the biggest increase in fuel prices. January 2020.
The increase in inflation is roughly in line with analyst expectations. The Bank of England expects the inflation rate to rise this spring, but I think inflation will continue to rise for a long time to come. This is due to the adoption of a new quantitative easing policy, namely, increased quantitative easing (QE) and increased government borrowing for COVID relief work Funding. May cause prices to rise.
In the coming months, this will have an amazing impact on the UK’s economic recovery after the 2010s. Speculative investments such as the stock market can frighten. If speculative asset prices are included in the CPI, they will be much higher than 2%.However, the rest are sitting with businesses and consumers, waiting for the lifting of COVID restrictions. The special price risk is that before the pandemic, these deferred funds will lead to excessive demand before the supply of goods and services is restored. The bank predicts that due to demand constraints, the spring inflation rate will rise to about 2% and will remain at that level in 2022 and 2023.
However, even if this inflation is “fixed”, their forecasts are more uncertain than usual. “If you look at the bank’s more detailed forecasts, you will find that one-third of the inflation rate in the next two years will be below zero or above 4%. In other words, you just don’t know. You can see below The table shows the average forecast of the darkest tones and the smallest forecast of the brightest tones. Economists or monetarists worry that banks have underestimated the impact of inflation.
The correct approach is that the past growth has always been M2 causing inflationary pressure The reason… It may be stupid to predict future inflation, but there are good reasons to believe that by mid-2022, the inflation rate may exceed your 2% and 4% targets within a second, by which time the government can Help cut spending and raise taxes, which will reduce the money supply.