Is inflation set to return to Britain?

UK annual CPI inflation chartMost investors seem to think inflation is no longer a problem. But most investors – not for the first time – could be wrong. The strengthening economic recovery is one reason to expect eventual upward pressure on prices.

In Britain, now that consumer confidence and consumption have gathered pace, “the next thing that should come is the anticipation of pay rises”, says Christine Johnson of Old Mutual Global Investors. Households haven’t had a real wage rise for five years.

Generally rising demand is [...]

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