Nutt: Inflation could hit 8%
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Jupiter income manager Tony Nutt believes inflation could reach 8 per cent in the UK by 2015.
Nutt (pictured) says while inflation is likely to fall back in the short term, it will rise again over the next four years. He says: “Inflation will fall back in the final quarter of this year and the first quarter of 2012 but I am fearful of the years to come as the deleveraging process is going to take time to unwind.
“I think that inflation could hit 7 to 8 per cent in the UK in the longer term. The historical evidence is clear. If there is a lot of money in the system that gets used and abused, it only leads to higher inflation. There is no doubt that quantitative easing leaked into emerging markets while the fuel and food cost push pressures do not help the argument that it will fall back longer term.”
The UK consumer prices index rose to 5.2 per cent in September, according to the Office for National Statistics, well above the Bank of England’s 2 per cent target.
Henderson chief economist Simon Ward says: “I agree it will fall back before rising again. To reach 8 per cent by 2015 is a bold forecast but it is not unrealistic.”
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Readers' comments (2)
Peter Herd | 11 Nov 2011 11:00 am
Crystal ball anybody
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Nick | 11 Nov 2011 11:15 am
I agree that the long term outlook for inflation is likely to rise. Quantitive easing is simply printing money & this has to lead long term to inflation Although I think the likelyhood of runaway inflation is slight, Germany found out what happens if you print too much hence there reluctance to countenance any form of EU printing money.
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