From upside to downside: Global recovery will bring with it a whole new set of worries. If growth is too strong, then inflation could break out, but if it falters, we could be tipped towards a deflationary spiral

摘要

Now that global equity markets seem to have bottomed and are making an impressive recovery, worrying really starts. It's said on Wall Street that bull markets climb a wall of worry (as against bear markets, which slide down a slope of hope). So what's to worry about? For starters, there are upside risks that the global recovery could prove too strong. Central banks such as the Bank of England and the United States Federal Reserve have pumped cash into their economies - in effect monetising some of the widening government budget deficits - which some fear will stoke inflation. The upward pressure on energy and commodity prices that is now evident could also bring inflation.