Tuesday, 16 February 2010

Inflation is creeping up in the UK...

There we go: 3.5% inflation rate.

In my last post I mentioned a risk of the return to Stagflation. Well, it seems I am not the only one having this thought:


Looks like Jeremy Warner is having the same views.

It is is a terrible situation for pensioners and savers who are now getting negative real interest rates on their savings.

If inflation starts showing its ugly face again, borrowing long term at a decent fixed rate will be a great trade to have. Inflation will pay for it.

You need to closely monitor commodities prices because they are steadily going up again as the CRB index is showing. Lyxor CRB ETF denominated in Euros displays this increase: FR0010270033 is the ISIN.

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