Stagflation or "stagflation-lite"?
3 Dec 07

A slowing economy and rising inflation has led to some calling out the word stagflation, conjuring up images of the 1970s.

However, we have to be cautious in the use of this word, as it should be used to describe double digit inflation and very high unemployment, which is not what the UK economy is going to slip into.

Paul Ashworth of Capital Economics has come up with a different term to describe the outlook for the US economy of stagnant growth and rising inflation - "staglation-lite".

Mervyn King said that stagflation is 'not the word I intend to use'.

Links:
Preparing for 'stagflation-lite' - The FT (3 Dec 07)