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Thursday, 18 February 2010

Inflation soars to 3.5% | Business | guardian.co.uk‏

The thing that strikes me is how wafer thin and weak the recovery is according to those figures. It seems that we are set for a period of instability, where inflation may jump around a bit before settling into a steady pattern.
Interest rates will have to rise before too long, but it's one hell of a balancing act between all the various factors, both long and short term.
A short-term rise in inflation may be no bad thing with people's ability to spend pushing up the index. The trick then will be to raise interest rates by the right amount at the right time to stop a bubble forming and bursting.

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