ECONOMISTS’ VIEWS: WHERE IS INFLATION HEADING?

 
Tim Wallace
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PHILIP RUSH | NOMURA
“Producer prices have been persistently pressurising profit margins, forcing firms to raise their consumer-facing prices. CPI could still hit five per cent, and we do not expect it to dip meaningfully below target at any point in our forecast horizon, even without another round of quantitative easing.”

HOWARD ARCHER | IHS
“At IHS Global Insight we expect the data released tomorrow to show annual CPI rose to 4.6 per cent in August from 4.4 per cent in July. This increase is expected to be driven by the sharp rises in electricity and gas prices that were enacted by several utility companies in August.”

PATRICK MINFORD | CARDIFF BUSINESS SCHOOL
“The MPC is gambling on low wage increases and firms being restrained by excess capacity from passing on higher costs; there is little sign of that restraint. For wages, a lot depends on workers and unions believing inflation will hit the two per cent target. There is a real chance that gamble will come unstuck and inflation will not fall below four per cent in 2012.”