What is stagflation and what can be done about it?

The UK is grappling with persistent inflation and lacklustre growth. Has it entered a period of stagflation, and what can be done if so?

Snail climbing pile of coins to represent slow economic growth alongside inflation, AKA stagflation
Slow economic growth and rising prices are not a good combination
(Image credit: CalypsoArt via Getty Images)

Stagflation is one of the most-feared words among economists and policymakers. With the UK struggling to revitalise growth, and with inflation proving stubborn, though, is the UK sleepwalking into stagflation?

Inflation jumped to 3% in January, though it cooled slightly the following month, slowing to 2.8%. The Bank of England targets a rate of 2%, so while inflation is not out of control, it is well above the government’s target.

Subscribe to MoneyWeek

Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE

Get 6 issues free
https://cdn.mos.cms.futurecdn.net/flexiimages/mw70aro6gl1676370748.jpg

Sign up to Money Morning

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Sign up
Dan McEvoy
Senior Writer

Dan is a financial journalist who, prior to joining MoneyWeek, spent five years writing for OPTO, an investment magazine focused on growth and technology stocks, ETFs and thematic investing.

Before becoming a writer, Dan spent six years working in talent acquisition in the tech sector, including for credit scoring start-up ClearScore where he first developed an interest in personal finance.

Dan studied Social Anthropology and Management at Sidney Sussex College and the Judge Business School, Cambridge University. Outside finance, he also enjoys travel writing, and has edited two published travel books.