Inflation risk premia in the post-pandemic economy
The Bank of England is renowned for having some of the longest economic data series in existence. This was evidenced on 15th July with the publication of MPC member Tenreyro’s speech regarding the effects of COVID-19 upon the UK economy. The transcript of Tenreyro’s speech includes a history of UK CPI starting in 1250 and charts, through the subsequent 770 years; 5 plagues, 2 cholera outbreaks and 3 flu epidemics. She observes that, through each of these 10 public health crises, the immediate effects upon the economy were typically inflationary. Then, over the 8 years subsequent to the onset of each episode, the aftermath tended to be disinflationary.
Read our latest report, where we explore:
- Pandemics are generally disinflationary, whilst wars are not.
- There are aspects of the Covid-19 pandemic that do not fit the historical pattern, making its aftermath look similar to a ‘post-war’ environment.
- Uncertainty over future inflation outcomes is set to rise.
- Inflation risk premia are good value in the US and in Europe, but not in the UK.
Read our latest report, where we explore:
- Pandemics are generally disinflationary, whilst wars are not.
- There are aspects of the Covid-19 pandemic that do not fit the historical pattern, making its aftermath look similar to a ‘post-war’ environment.
- Uncertainty over future inflation outcomes is set to rise.
- Inflation risk premia are good value in the US and in Europe, but not in the UK.
