Will the pandemic cause a surge in inflation? – The National

Will the pandemic cause a surge in inflation? – The National

Other countries are following its lead and when those trillions hit the global economy, inflation could catch fire.. Mark Richards, multi-asset strategist at fund manager Jupiter, says monetary easing after the financial crisis did not trigger inflation, but this time may be different. ". Central banks are likely to tolerate or even aim for above-target inflation, partly to compensate for years of missing targets, partly to help inflate away sovereign debt," he says.. Many who have taken advantage of rock bottom interest rates will struggle to service their debt if interest rates hit 5 per cent, 10 per cent or even 15 per cent.. Stagflation is what happens when a stagnating economy simultaneously suffers inflation, and is the worst of both worlds.. A decade of stimulus failed to generate inflation.. Paul Donovan, chief economist at UBS, says central banks are not attempting to stimulate the economy, but save it. ". Dr Ryan Lemand, senior executive officer of ADS Investment Solutions, says the recovery will take a "very, very long time", as it will destroy demand.. Instead of preventing job losses and company foreclosures, today's stimulus will flood into the stock market, Mr Lemand says: "The Fed is even buying exchange