The spectre of inflation has been much noted in the past few months in the financial markets. The recent higher level of inflation over the Bank of England forecast in the UK has caused some alarm bells to ring. One fascinating indicator of concern was the steadily rising price of used cars.
Normally the used car price is a falling metric, but in the topsy turvy world of pandemic economics, a supply and demand imbalance has created the conditions for the opposite of normal to happen.
It happened once before in the past 30 years after the 2008 financial crash.
Chip shortages are adding to supply woes of new cars, demand has shot up due to staycations and car use has also increased in the face of pandemic restrictions - think public transport.
A perfect cocktail for bizarre market conditions to obtain.
