Are expectations of inflation too low?
Inflation is now on the way up. That was to be expected. As Mervyn King, Governor of the Bank of England, keeps reminding us, we should expect inflation to be very volatile for some while. But, is it me or do the forecasts for inflation reaching a mini-peak at about 3% in the early part of next year seem to be a little timid? The reason I am a bit unsettled is that if expectations for inflation prove to be…