UK inflation heats up to 5.4%! Here’s how I’d invest in the stock markets now

As if the previous inflation numbers were not bad enough, it gets worse. In December 2021, the UK’s inflation, based on the Consumer Price Index (CPI), rose to 5.4% on a year-on-year basis, up from 5.1% in November. So far, it has not had an impact on stock markets. The FTSE 100 index is actually inching towards 7,600 as I write this Wednesday morning, completely ignoring the inflation print. This is fortunate, but I do believe that the uncomfortably high price rise could take a toll on companies’ financial health over time. It already has started to do so, which is also why inflation is rising. At least some companies are passing on increased costs to customers now. In fact, it has now risen enough to impact wages. Real wages in the UK have fallen for the first time in November 2021 since July 2020 as inflation rises. This essentially means that the average person is able to afford less now, which of course is bad news for both consumption and investments, and from there, the stock markets. But as an investor, there is very little I can do about high inflation. What I can do is make investments that...

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