""Policymakers are facing a complex inflation picture, but the right response is restraint. This surge is externally driven, concentrated in energy markets, and tightening policy into it risks compounding economic fragility rather than solving the problem.""
""Energy shocks of this nature move fast and hit hard. The UK's reliance on imported energy leaves it exposed. Consumers feel it at the pump immediately, and businesses face higher input costs within weeks. Monetary policy cannot counteract geopolitical supply disruption.""
""Inflation is being pushed by factors outside domestic demand.""
UK inflation increased to 3.3% in March, influenced by rising fuel prices due to the Iran conflict. The CEO of deVere Group emphasizes that this inflation surge is externally driven, particularly in energy markets. He advocates for monetary policy restraint, warning that tightening policy could worsen economic fragility. Diesel prices approached £2 per litre, reflecting global oil volatility. Additional inflationary pressures stem from rising food prices and travel costs. Producer price data indicates further inflation risks linked to higher oil prices, highlighting the impact of external factors on domestic inflation.
Read at London Business News | Londonlovesbusiness.com
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