Friday 22nd October 2021
A sharp fall in commodity prices hasn’t dampened inflation expectations, or the assumption that central banks will bring interest rates forward. NAB’s David de Garis says it’s been a day when bond markets in particular have been bitten the inflation bug, with pricing suggesting US inflation will average three percent over the next five years, even higher in the UK. Two surveys highlighted that supply chain difficulties continue, the Philly Fed’s Business Outlook, and the CBI Optimism Index. The CBI survey showed that two thirds of UK businesses were complaining of supply shortages, the last time it was that high was in January 1975. Oh dear.