Wednesday, 14 October 2015

Deflation again

How bad can it get?

First what is deflation?

How has it happened?

The ONS [Office for National Statistics] said that a smaller than usual rise in clothing prices, and falling motor fuel prices, were the main contributors to the drop in the rate as the Consumer Prices Index fell to -0.1% in September.

This has now happened several times in the past couple of years and the base rate has been 0.5% for over seven years with no likely hood of rising, much to the chagrin of savers.

Deflation is inevitable anyway in the aftermath of the by far biggest credit mountain in the history of not just mankind, but of the planet, if not the universe.

What can the Bank of England do now?

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