The current spell of high inflation in the UK is causing many difficulties — and it’s far from behind us. Inflation is broad based, resulting in sluggish service sector prices, making it unlikely that inflation will fall below 4% by the end of 2023, or hit its 2% target before the second half of 2024.
Economic institutions will learn from this situation, with demand for insuring against inflation risk in the future likely to remain high.
In the first of our macroeconomic outlook blogs, Professor Ricardo Reis of the London School of Economics sets out why inflation is stubbornly high and what is required for it to come down.
