What Does UK Stagflation Mean For US And Western Economies

Wednesday, January 26, 2011
By Paul Martin

by Tyler Durden
ZeroHedge.com
01/26/2011

When a few weeks ago we predicted that while contagion was the word of 2010, stagflation will define the current year, we had no idea how fast there would be glimmers validating our outlook. Yesterday’s UK GDP data was the first datapoint that showed a decline in GDP even as the BOE’s Posen infamously announced a day before that that UK inflation was surging. That, ladies and gentlemen, is the definition of stagflation. Coming soon to a banana republic near you.

Below we share Goldcore’s outlook on what UK’s slide into stagflation means for the reas of the world.

Stagflation in UK a Real Risk to US and Western Economies, via GoldCore

What were termed “shock” UK GDP figures yesterday, led to falls in the FTSE and the pound sterling which fell against the dollar and gold. Sterling’s fall saw sterling gold prices rise from £833 per ounce to over £842 per ounce after the news.

Economists were once again surprised by the very poor UK GDP figures which showed the economy has contracted by 0.5% rather than growth of 0.5%. This clearly shows that the UK is now experiencing stagflation or high inflation and very low or contracting economic growth.

The Rest…HERE

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