Valuers Run the Risk of Mismatching Inflation Assumptions

Business Valuation UpdateVol. 29 No. 6
June 2023
global business valuation
international business valuation, discounted cash flow (DCF), terminal value

Summary

During a presentation in the United Kingdom, Nick Forrest (UK Economics Leader for PwC) made some observations that should resonate with business valuers worldwide. In the UK, the Bank of England established its target inflation rate of 2%, but inflation varies hugely from this target, even during noninflationary periods, depending on which factor an analyst uses.