Not that long ago, even the harshest Bitcoin skeptics started to change their minds, as it appeared that cryptocurrencies could potentially serve a big role in preventing inflation-caused losses. Others would start to look at gold’s virtues again.
And as everyone, not only experts were trying to predict the future of the economy after the inflation hits, it appears that a lot will depend on the things that will happen in the USA.
The Federal Reserve chairman, Jerome Powell, gave an interview on CBS, where he stressed that the economy is currently at the point of inflection. Covid-19 help measures and the vaccine are still the priorities, but inflation is right around the corner, and its arrival is currently pushed in time as far as possible. But this doesn’t mean it won’t arrive.
The inflation in the first months of 2021
The current inflation rate could give hope, as it is relatively low. But this all could be easily explained, and it's the unknown future, that scares experts the most. Currently, (as of April 2021) the inflation rate is 0.4%. It fell amid easing the CPI rates (Consumer Prices Index). But in December, it was 0.6%, and it grew to 0.7% in January.
The increase was due to the household stores and food retailers raising the prices and simultaneously withdrawing from a lot of discounts. But then again we could witness a sharp rate decrease in February when it came down to 0.4%. The reason? Clothing retailers and car dealers introducing massive discounts.
We already know that consumer spending could influence inflation. But also the government’s actions could do so, and the potential rise after they will provide the economy with the extended financial support could be devastating.
To get to know more about the inflation rates in the United Kingdom, but also its effect on the global economy, feel free to visit Betty Jordan’s comprehensive Disruption Banking piece. To enter, use the link: https://disruptionbanking.com/2021/04/12/how-did-the-pandemic-affect-inflation-rates-in-the-uk/
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