Now the sterling effect is fading, inflation is a warning sign

“Most of that should have passed through the supply chain by now, allowing inflation to fall” writes Tim Wallace for The fall in the pound through 2016 forced up the price of imports and sent prices spiralling.COmbined with low unemployment, wages edging up and productivity growth remaining miserable, this may start to push upwards on inflation.Yet inflation stayed stubbornly high at 3pc in January, rather than falling a touch as economists had forecast.There are several forces at play in the domestic and global economies pushing prices in different directions.

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