But more costly oil will probably lead to higher inflation and lower private consumption.

The increase in labour cost also led to inflation throughout the economy.

But market participants' biggest concern is that strong economic growth could lead to inflation and higher interest rates.

The main argument against reducing rates is that doing so might lead to worse inflation.

"But close behind are the forces leading to inflation," he said.

Our huge Federal budget deficits have not led to either inflation or recession.

There is concern that this spiral will lead to inflation.

"So this implies that a strong economic growth doesn't have to lead to higher inflation and interest rates," he said.

That leads to high inflation and it's not really viable for any longer period of time.

The story that it would lead to inflation is simply wrong.