Inflation is an inevitable consequence of an economy reaching its full potential. To have a better understanding of where the economy is heading, it’s important to monitor some key leading indicators that can give us clues about where inflation might be headed. Leading Indicators Of Inflation, commonly referred to as LIIs, are economic indicators that tend to predict future changes in the rate of inflation. These indicators include measures such as consumer confidence, housing starts, money supply, and industrial production. By keeping track of these indicators, we can get an idea of how the economy is likely to develop and how inflation may affect it. With this information in hand, businesses and governments can act accordingly and take appropriate steps to prepare for higher prices.