Nothing to fear: Real estate investors may well benefit from moderate inflation
Inflation jumped sharply in many countries during the summer months. This was to be expected, as consumers are now making deferred purchases following the relaxation of COVID-19-induced restrictions and the vaccination campaigns. Yet, supply cannot always meet increased demand. This is apparent to anyone who is booking a trip or buying certain items at the moment.
Economists are now asking whether this is just a brief flare-up of inflation or a phenomenon that will be with us for a long time. The European Central Bank (ECB) has already taken the precaution of relieving itself from pressure to take monetary action by adjusting its inflation target upward. Instead of its previous “below-but-close-to-2-percent” objective, the new target is “2 percent”, with significant medium-term deviations, both upwards and downwards, considered equally undesirable. This is definitely a paradigm shift. There are also clear signs that, for the time being, there w