Making your mind up

Stagflation is back in industry vocabulary with some even making comparisons between now and the seventies

While it is true that economic growth is falling at the same time as higher commodity prices are fuelling inflation, the scale of this phenomenon cannot be compared with the deep recession and 27% inflation of the decade of flares, the Austin Allegro and the Bay City Rollers. Nevertheless, the monetary authorities now have to decide whether they wish to attain low inflation or keep economic growth in positive territory as these two objectives start to appear mutually exclusive. Few people dispute that growth in the UK is losing momentum, the only debate being as to the scale. First-qu...