Inflation / Deflation and the Great British Shopper


Deflation, or indeed the threat of deflation is supposed to defer spending as people wait for prices to fall before making purchases. With inflation at or very near to 0% the risk of deflation is high.

Economists and the Bank of England are divided on how to address the threat of deflation. Traditionally a rise in interest rates will cool inflation and the economy with it. And a cut stimulates the economy as it drives up demand. So what to do.

It seems shoppers may have rescued the economists from their dilemma and……gone shopping. As the FT reported:

“Britons went on a shopping spree last month as prices on the High St fell by the most on record, dispelling fears that the UK is on the brink of a deflationary downward spiral”

Hooray for the Great British shopper!!!

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