Why is inflation higher in the UK than elsewhere? Thoughts from M&G:

  • VAT rises
  • Lagged effect of weakening GBP
I was thinking about this while looking at chart packs from the NY Fed. It’s hard to be negative on the US economy after looking at these. And leading indicators (e.g. Conference Board) and liquidity measures (e.g. Bloomberg financial conditions, BBB spread) point to further improvement in asset prices.