Is UK inflation back with a vengeance? Hardly - and here is why

John Ricciardi, CEO of Kestrel Investment Partners, explains how shifts in investor perceptions of UK inflation could affect markets over the coming months.

The latest consumer prices ex food and energy have come in with an increase all of 1.5% over the past year. Headline UK consumer prices have risen only 1%, despite the falling pound making imports considerably more expensive. Now that Bank of England has countered the Brexit shock to the UK economy by loosening the reins of monetary policy, will British domestic prices gallop ahead? Unlikely. Downward pressures on global prices are so strong today that no major western economy has base rates higher than one-half of one percent, and most have negative short term interest rates.   Th...