Since the pandemic, inflation has risen further and for longer than most market participants expected in many countries including the UK. Strong demand, ongoing supply chain constraints, rampant energy and commodity price inflation continue to push prices higher. How high will inflation go, and will it persist? Has the era of respectable growth rates and low inflation finally come to an end?

We have introduced “InflationWatch” to help clients assess the outlook for inflation, and we plan to publish it quarterly. This paper provides:

• An update on the latest position on inflation.
• Consensus forecasts on future inflation rates.
• Our view on whether the risks to the consensus view are tilted to the upside or downside.