Leaviss: Pessimistic BoE to let inflation bubble grow

The Bank of England may allow inflation to overshoot its target “for some time” amid the uncertainty that following the triggering of Article 50 on Wednesday, M&G’s Jim Leaviss has said.

Leaviss: Pessimistic BoE to let inflation bubble grow

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In the case of troubled negotiations, he said monetary policy would likely remain stimulatory and include another round of quantitative easing, while the government may try to stimulate the economy by loosening the fiscal reigns.

He added: “Clearly the best scenario would be a civilised divorce, where negotiations are constructive and low-key, thereby minimising any potential impact on demand.”

However, he argued it may not be all bad news as short-term economic growth could benefit from the next 12 to 18 months as companies stockpile inventories and customers bring forward consumption prompted by the fear of import tariffs.

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