Economic Brief: Stagflation a worry for Britain

24th January 2011

 

Analysts expect Tuesday's growth figures to show an anaemic 0.5 per cent growth for the last quarter of 2010, perilously close to no growth at all.

The Sunday Telegraph has some rather grim news for readers. It warns that Britain may be about to enter a period of stagflation with rising prices and rising unemployment.

The paper says that analysts expect Tuesday's growth figures to show an anaemic 0.5 per cent growth for the last quarter of 2010, perilously close to no growth at all.

 It is the economic situation all economists, finance ministers and central bankers want to avoid at all costs. It is just that they never agree on the remedy.

But like economists, comments are split about what all this means.

Commenter matt smith wants to take the cuts on the chin now.

"The government hasn't been tough enough. More cuts and higher rates are needed. The short term pain would be worth the long term gain."

But gerontocrat believes that in his locality stagflation is already underway and he has his own way of measuring it.He writes: "In the old industrial city where I live, stagflation arrived with the Xmas turkey. My local pub halved the entry fee for the New Year's Eve bash, but the pub was not crowded as it used to be even in hard times. There can be no doubt that come April Fools' Day it will be a lot worse."

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