Could inflation kill any potential worldwide economic upturn?
Today's news that the US authorities are set to inject more capital into the US business arena in an attempt to shore up the wavering US economy is a body blow for those hoping that the US would lead the way. This comes just hours after severe warnings that inflation, both in the UK and around the world, could spring back to life due to a number of factors including the price of oil and the price of wheat. So could inflation kill any potential worldwide economic upturn?
While there's no doubt that central banks around the world will be looking to inject more capital into their local business arenas and local money markets, there's a need to be careful that too much "cheap finance" is not made available. Cheap finance will feed directly into the animal which is inflation which could turn around and push back any potential short to medium-term economic upturn.
Only a couple weeks ago some experts had assumed that inflation was but a secondary factor for the likes of the Bank of England but over the last few days it has become more prominent than ever. A difficult situation for central banks around the world is set to get more complicated!
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