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Good inflation?
He believes the economies have "good inflation protections and a history of being willing to repay their debt".
Economists said that the good inflation outlook will likely encourage the central bank to administer a few further rate cuts.
Although low inflation is generally good, inflation that is too low can pose risks to the economy - especially when the economy is struggling.
Christine Callies, chief investment strategist at Merrill Lynch, reckons that any general increase in prices now should be seen as "good inflation not bad inflation".
The good inflation figures on Monday – hitting the 2% target for the first time since 2010 – re-emphasised that the UK economy has turned a corner.
Similar(42)
We find persistence in the series, that is, core goods inflation depends on its own past value.
Core inflation in the euro zone dropped from 1.2% to 1.1% and Jonathan Loynes of Capital Economics points out that core goods inflation is 0.4%.
You can see the divergence in core goods inflation and core services inflation in the chart below A few things stand out.
Last, we find no meaningful effect of the unemployment gap on core goods inflation, consistent with commentators who contend that it is global (and not domestic) economic slack that impacts core goods inflation.More simply, services inflation is about expectations and unemployment, while goods inflation is about global capacity utilisation.
Another is how very low goods inflation has been for more than a decade, only rarely straying anywhere close to 2%.
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