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Inflation Falls Again

Community Veteran
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Registered: 12-08-2007

Inflation Falls Again

Inflation, measured by the consumer prices index, fell this month to 0.5% - it's lowest joint rate on record and last seen in 2000. This has been helped by the recent fall in oil prices.
and for the pound in our pockets.Inflation Falls
Good news for the economy.
Jim:green link fixed mod:end
17 REPLIES
Community Veteran
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Registered: 15-06-2007

Re: Inflation Falls Again

But the RPI is still 1.6%
Community Veteran
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Re: Inflation Falls Again

Yes but the RPI has also fallen from 2%.
Community Veteran
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Re: Inflation Falls Again

I don't understand why very low inflation is regarded as "bad" by economists and politicians.
Community Veteran
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Re: Inflation Falls Again

Robert Peston tries to answer that in his article here:
Peston
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Re: Inflation Falls Again

Inflation is just changing the numbers and making the money in your pocket worth less than it should be, many moons ago, a house could cost £600, and a car £120, and that was considered highly expensive, now though, the real life value (not fiscal) is the same, but the numbers are have more zeros on the end, in reality, inflation means nothing, it's just the bankers and governments that like it, that is until we end up in Zimbabwe's shoes and have trillion pound notes being printed cos the inflation went bananas... Shocked
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Re: Inflation Falls Again

Seems you have researched that, quite well....  Cheesy
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Re: Inflation Falls Again

Seems someone's record is stuck today... Roll eyes
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Re: Inflation Falls Again

I see in the Robert Peston article it's all about "moderate inflation tends to be associated with steady growth".
But I think there should be an "allegedly" in there somewhere.
It basically seems all smoke and mirrors.
You think you have more money your pocket but you haven't really.
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Re: Inflation Falls Again

From an economic viewpoint, he is correct, which is why most central banks have a target rate of inflation of 2%.
One of the simplest things to look at is wage growth. With low levels of inflation (or even deflation) wages are not increasing, which means people have less money to spend. If people spend less money, there is less money being injected into the economy by consumers/businesses etc.
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Re: Inflation Falls Again

Quote from: shutter
Seems you have researched that, quite well....  Cheesy

I couldn't have put it better myself Roll eyes
Shutter apologies quoted wrong post initially.
Community Veteran
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Re: Inflation Falls Again

not to worry  ! ! 
ick , worry
ick  , worry
Grin Grin
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Re: Inflation Falls Again

That great industrial nation Japan has had this very problem. People refusing to spend because prices will be lower tomorrow. We need a virtuous inflation rate or people won't spend.  Roll eyes
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To be is to do - Kant
do be do be do - Sinatra
Community Veteran
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Re: Inflation Falls Again

Yes, C5 News has just covered the problems of deflation, maybe you saw it Wink
It is generally accepted that inflation of about 2% is the acceptable level.
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Re: Inflation Falls Again

Low inflation has got to be better, I think its deflation thats considered bad.
Inflation ultimately means the value of cash decreases, there is only limited cash in the economy so its obviously bad and things only keep working due to the credit system which creates money out of thin air.