IEA Economics Fellow Julian Jessop has been quoted in Politics Home arguing that high savings in the economy are unlikely to exacerbate inflation.

Julian said:

“Ideally, we will enter a ‘Goldilocks’ scenario where the excess savings makes sure the economy is not too cold, and where higher interest rates make sure the economy is not too hot,

“There are plenty of reasons to expect inflation to fall sharply, even without further action from the Bank. Interest rates have already risen a long way and the full effects have yet to be felt.

“Growth in money and credit has slowed sharply. Producer price inflation is well down. And some prices are now falling outright, including fuel prices, some basic foods, and domestic energy bills.”

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