Some companies that import products into the UK are already starting to raise prices to counter the weaker pound. According to Bloomberg (HERE) it includes Peugeot and Dell. Others will follow and these numbers will find their way into the official inflation statistics and we will see a rise in the CPI.
The BoE will then be in a dilemma. Do they raise interest rates to combat inflation or keep the low to boost the ailing economy? The last time we had stagflation (a combination of stagnation and inflation) was ironically I think in the 1970s and this partly was what we joined the EU to control.
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