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‘Higher growth and the return of inflation are the key elements’“To think that inflation is something that would just simply fall out of the sky once a central bank expands its balance sheet has always struck us as peculiar,” he says. “Inflation is a process of firms raising prices, or labor demanding higher wages; processes which have no direct link with quantitative easing. In the five years to come, strengthening demand will result in economies running into capacity constraints again, which will trigger the re-emergence of inflation.”