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Stagflation - not coming to an economy near you
High inflation is generally not regarded as a good thing, as it reduces the value of savings. Combine that with high unemployment and a stagnant economy, and you have all the ingredients for a nasty cocktail and also the making of a high “misery index”. With many economies coming out of Covid-19 lockdown and demand likely to increase, but supply disruptions likely to linger, some pundits have been pointing to the likelihood of stagflation and wagging a warning finger. It is, in our view, entirely possible, even probable that such conditions lead to short-term relative price increases in some areas, for example, ... (full story)