Era of 'growthflation' is a strong opportunity for value investors

2022 is an ideal time

Over recent months, it has become increasingly clear that unprecedented levels of quantitative easing and extensive fiscal policy are feeding both an inflationary environment and an economic recovery.

The Bank of England's decision to raise rates to 0.25% is a strong indication that they no longer see inflation as transitory. The concern which remains is, in absence of a huge shock to the global economy, they may have fallen far behind the curve. With economic growth also expected to continue - investors must brace themselves for a new market paradigm; the era of growthflation. Growthflation occurs when you get a spiral of strong demand leading to higher prices and wages leading to further demand strengthening. In this scenario, central banks should be expected to tighten monetary pol...