August 28, 2007

World economies to be hit by inflation

A report published by Earthtimes suggests that a combination of decreasing production coupled with rising demand is set to send food prices higher this year – encouraging a rise in global inflation.

The rise in inflation would occur because food harvests around the world are falling as extreme weather destroys crops from major producers – at a time when demand for food is rising, especially powered by India and China as the new wealthy turn to Western lifestyles and diets.

The increase in food is likely to impact inflation as measured by most central banks, such as the CPI in the UK, resulting on pressure for them to raise interest rates – further impacting economies already stretched by debt levels.

Source [Earthtimes]

Filed Under Economy