UK Inflation Soars: Expert Reaction

Investors are puzzling over a rise in inflation to the highest level since spring 2012. What will the Bank of England do next week? Investment experts give their views

Morningstar News Team 15 September, 2021 | 12:23AM
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Annual inflation rose to 3.2% in August, the highest in nine years and a jump of 1.2 percentage points since July, the biggest jump since records began in 1997. Rising prices for food, hotels, and transport were behind this increase in the consumer price index (CPI). The Office for National Statistics says this jump in the cost of living is likely to be temporary because last August food prices were artificially lower during the Eat Out to Help Out scheme.

Unless wages keep pace with rising costs, inflation is generally negative for consumers. But what does it mean for investors? Inflation is a huge topic for global investors, perhaps the biggest this year after Covid, and the logical question is what action central banks plan to take to tackle it - and when.

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