U.K. January Inflation Picks Up for First Time in Six Months

The video discusses the potential impact of fiscal stimulus on inflation in the UK, highlighting the demand-supply imbalance and its effects on the economy. It examines the labor market, rising labor costs, and the Bank of England's interest rate decisions. The uncertainty surrounding Brexit and its impact on the UK's supply potential is also explored. The video further delves into the lack of business investment, capacity constraints, and revised growth forecasts, emphasizing the need for careful fiscal policy management.

What is the expected impact of fiscal stimulus on the UK's GDP according to the transcript?

• A decrease of 1.0 percentage points

• An increase of 0.7 percentage points

• No change in GDP

• A decrease of 0.7 percentage points

Why has the Bank of England previously raised interest rates?

• Due to a decrease in labor costs

• To encourage more business investment

• To counteract deflation

• In response to rising labor costs

What factor is contributing to the uncertainty about the UK's economic future?

• The decrease in fiscal stimulus

• The UK's relationship with the EU

• The global economic recovery

• The increase in labor costs

What is a potential source of inflation according to the transcript?

• Increased labor market investment

• Lack of business investment

• Excessive fiscal stimulus

• High consumer confidence

What constraint might the Chancellor face regarding fiscal stimulus?

• High inflation expectations

• Excessive business investment

• Lower growth expectations

• Strong labor market growth