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The fading inflation scare

The UK’s inflation scare is fading away. This might seem an odd thing to say given that latest figures show that the CPI measure of it has jumped to 2.5 per cent, its highest rate since 2018. But it is true in the important sense that inflation expectations have fallen.

There are two decent measures of this.

One comes from the Bank of England’s quarterly survey of the public’s attitudes to inflation. The latest of these, released last month, shows that the inflation rates expected over the next year and the following one have both fallen slightly.

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