Mark and note:
Howard Reed says:
February 27 2021 at 6:12 am
I think the risk of sustained inflation in the 2020s is miniscule. While there is some pent-up demand and a possibility of a slight uptick in inflation when the current lockdown eases up and things become a bit more normal, that’s all it will be – a slight uptick, if that. CPI inflation is currently 0.7% on the latest annual figure, so it might rise to 2 or 3%. So what? I would then expect it to fall back below target after a few months. You and Danny are absolutely right on this. It’s a storm in a teacup, being propagated by the same inflation hawks who have been consistently wrong ever since 2009 in predicting a massive increase in prices.
I do think that without the reversal of QE at some point there will be a significant inflation. There’s a lot of weight on that “at some point” of course.
But we’ll see, won’t we? The universe being nice about stuff like this, it does, eventually, test predictions.