ASI: Few worries about rising inflation

ASI: Few worries about rising inflation

Inflation
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Luke Bartholomew, Chief Economist at Aberdeen Standard Investments, comments on UK inflation figures published this morning by the Office for National Statistics in the UK.

“Like many economies, the UK is experiencing a sharp increase in inflation as the economy unlocks and various business sectors work through supply bottlenecks and other idiosyncratic quirks. Inflation will likely increase a little more from here in part due to the reversal of the VAT cut for hospitality. However, we are not especially concerned that this increase in inflation will persist. Once the one-off effects currently buffeting the economy have passed, inflation should start to moderate as spare capacity weighs on price pressure. So for now there is little reason for investors to worry that the Bank of England will soon be withdrawing its monetary support.”