Inflation is always associated with a sustained rise in prices and in this case, a high rise in prices or high inflation rate is caused by economic growth on most occassions. However, it is important to note that there are some occasions or rather circumstances where inflation can occur despite slow or weak economic growth. But in most cases, strong economic growth always results in higher inflation rate. Higher inflation rate is expected when aggregate demand expands faster than aggregate supply. In this case, if demand rises faster than the supply, it is evident that the economic growth is higher compared to the long-run rate of growth. In addition to that, if the economy of a country expands rapidly, then the country should have expectations of getting inflationary pressures. This is mainly because, when there is high growth, firms are faced with supply constraints due to the fact that there is a rise in demand more than the supply and they are forced to push the prices up. Also, more employment is always associated with higher growth and when the rate of unemployment falls it will result in upward pressure on wages which will eventually lead to inflation.

It is important to note that inflation occurs when the economy of a country experiences boom. On the other hand, high economic growth can occur without a rise in inflation rate. This always occurs when demand increases at a similar rate to supply. In most countries, rise in prices is always associated with the rise in the cost of productions. Though in most cases, this type of inflation is always temporary. Hence, in some countries, rise in prices can occur despite low rates of economic growth and thus rise in prices are caused by cost-push factors such as very low growth, high unemployment and low wage growth. For instance in 2010/2011, rise in prices in the UK was caused by various factors such as rising oil and commodity prices, rise in taxes and the effects of devaluation which caused the prices of imports to rise.

In the article The Three best funds for a junior ISA in 2017, David Thorpe tries to explain how an investor called Adrian Lowcock identified three of the most favorite funds for a junior ISA this year. According to the article, Adrian stated that there were two types which include cash junior ISAs and stocks and shares junior. He nominated Fidelity Global Dividend as the first fund because it is globally diversified hence it offers income objectives to investors with long term consistent returns. He stressed that the construction of the portfolio was entirely through stock selection which focuses on companies which offers sustainable and growing level of income. Adrian Schroder nominated Asian Income as the second fund. He commented that Richard Sennitt who was the manager took an unconstrained approach when it came to investment in the Asian income stocks. Adrian stressed that this fund offers protection in volatile markets thus providing long term growth. He also said this firm continued to grow with the region’s economies in terms of demand for goods and services thus enabling the young and growing population to become wealthier. Adrian final choice was Franklin US Smaller Companies. According to him, the managers of the firm ran different approaches when it came to investing in small companies. One of the approaches was investing high quality growing companies. He stated that smaller companies can be quite volatile in short term period but very rewarding in the long term.

This article relates to economic growth and inflation because juniors are expected to save in savings accounts which offer decent rates enough to keep pace with the rate of inflation. In this case, the article tries to explain the three major funds for a junior ISA which will enable the younger and growing population to become wealthier. Also the author tries to show how the funds can best offer sustainable and growing level of income and thus improving the economic growth in the long term. It is important to note that an investment based junior ISA always has more rewarding options because it is clear that the stock market always outperforms cash in the long term. This article is relevant because high inflation is always a nightmare to savers especially those with low savings interests. The only critique about the articles is that it has focused much on the savings without clearly showing how the savings can result to rise in prices and how it will affect the economic growth.