Ashby's Answers: Inflation, inflation, inflation

ASHBY'S ANSWERS

Much to the embarrassment of Mervyn King, UK consumer price inflation has been above 3% in every month so far in 2010.

And, despite the current low yield on gilts, it looks as though the governor of the Bank of England may have to endure the pain of writing more letters to the Chancellor of the Exchequer over the coming months as inflationary pressures appear to be increasing. For example, high street chain Next recently reported retail prices for its clothing are likely to be at the top end of the previously stated 5% to 8% range for the first quarter of next year. This may only be the beginning, as its chief executive Lord Wolfson warned the speculative bubble in cotton prices could drive retail prices...