Banks turn to psychology to battle inflation

Banks turn to psychology to battle inflation


With high food and oil prices and a lull in consumer confidence there are concerns that the psychology of inflation is taking its toll on the economy and this has a knock on effect from the investor to the consumer to the central bank. 

The banks are worried that if everyone takes measures to avoid being hit by high inflation this could in turn lead to inflation continuing longer than it should do. Whilst high inflation is currently occurring, it is people’s belief that it is set to continue in the long term that could cause further problems. The Federal Reserve has said it will consider raising rates after they were forced to cut borrowing costs with the US economy heading for a slump.

Whilst the inflation crisis has hit the banks, privately funded companies are taking a lesser hit. For example, in the world of the mortgage intermediary it could be in best interests to go down the route of approaching smaller firms with private funding lines rather than relying on the big banks who are desperate to preserve themselves.

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