Tuesday 31/03/2020

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Inflation: what scenarios could the future bring?

Chief Economist

Despite record low interest rates and unprecedented balance sheet expansion most central banks are still looking for higher inflation.

With interest rates around zero and the economy stuck in a liquidity trap, higher inflation is highly welcome as it reduces real interest rates and helps to erode elevated private and public debt levels.

In this note our macroeconomic team has explored what the future might bring with regards to inflation:

  • the economic theory behind inflation
  • two important lessons from recent history
  • what scenarios could the future bring?
  • concluding remarks

Please click here to discover this note.