IoD: The real fear is that inflation becomes embedded in routine business decisions


Commenting on the decision by the Bank of England not to raise interest rates from a historic low of 0.1%, Kitty Ussher Chief Economist at the Institute of Directors, said: 

“Transitory inflation as the economy reopens is one thing, but the real fear is that inflation will become embedded in routine business decisions. 

“With the vast majority (86%) of Institute of Directors members now expecting prices to rise faster than the Bank of England’s target next year, and a substantial minority (37%) expecting inflation to run at over 4%, the risk is that the reporting of today’s decision will only raise expectations of inflation further.”