Bank of England Accepts Higher Inflation Likely

By J Drew -

 After the BoE August policy report I posted here that I thought inflation was likely to be higher for longer than anticipated and that I thought the Bank of England were downplaying the risks to inflation.

With their September policy report it seems like the BoE are now catching up and have stated that they think "cost pressures may prove more persistent". It's interesting that they have a lag in their assessment which presumably is due to their data collection whereas my assessment was based on what I see around me. 

Everywhere you look there are places advertising for staff at all levels and all types of role. Hospitality seems in particular demand but even retail where you've had huge closures over the last 18 months there are adverts for jobs. 

Speaking to friends and colleagues about getting work done, everyone is finding material prices higher and difficulty getting hold of tradespeople to do the job. You then have the rises in energy costs and fuel prices.

All together it paints a picture of prices rising that the Bank of England seemed to have discounted so it will be interesting to see which is right and if their belated acceptance is correct.

On the plus side my solar panels Feed in Tariff rates are set based on inflation for December so a rise to 4% or more by the end of the year will have a positive effect on those payments.

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