While it seemed like economic recovery wasn’t too far away at the end of last year, it’s becoming clear just how much of a threat increasing inflation is to that goal. The more inflation continues to rise, the less disposable income the public will have, and financial bodies are strategising how to proceed.
This does not constitute advice and advice should be sought in all instances before acting on it.
According to the Financial Times, more than 40% of the economists they surveyed confirm that inflation is a serious risk to the economic health of the Eurozone, bringing it to the top of the list of concerns for countries within Europe and those that depend on trade with them. Coupled with the persistent coronavirus, 2022 could prove to be a rollercoaster of a year.
Unfortunately, the response to curbing inflation is to usually raise interest rates.
While they are currently sitting rock-bottom in the UK, the act will have a knock-on effect and temper any kind of progress made towards recovery.
The reason for rising inflation can often be linked to recovery efforts – after activity restrictions were lifted, many struggled to keep up with demand and as a result, energy costs were driven up and further supply chain disruptions followed suit in the form of resource shortages – both material and people.
Inflation estimates continue to rise across the globe.
Professionals advise keeping a close eye on figures as they’re released as any policy changes that will affect the economy will no doubt come from any developments in either direction.
Finding the right balance between fostering economic recovery while also attempting to curtail inflation, all in the context of coronavirus, will be the challenge in the year ahead. Be sure to keep abreast of the ever-changing financial situation both at home and abroad and don’t hesitate to reach out to your trusted adviser with any questions or concerns.
Want to build & protect your wealth?
Investments | Financial Planning | Retirement | Save Tax | Protection |
Dental & Medical Financial Services have been helping doctors and dentists to build and protect their wealth, whilst saving tax for over 25 years.