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Britain Falls Back Into Deflation

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Guess the B of E will breath a sigh of relief when the oil shock of late autumn 2014 finally drops out of the rolling annual stats and we get a leap back to over 1% inflation.

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Guess the B of E will breath a sigh of relief when the oil shock of late autumn 2014 finally drops out of the rolling annual stats and we get a leap back to over 1% inflation.

It sounds like they can raise interest rates.

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They'll still keep bleating on about the big scary monster that is inflation as a reason for keeping rates nailed to the floor

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"A bit of extra cash in the pockets. The essentials are down in price"

But what about housing??

Those figures would look completely different with housing included ..which is exactly why they are ...

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BBC are on the case.

Lunchtime news went to a Suffolk NHS pensioners club...

Question: How do you expect to cope with no increase in your pension, yet deal with rising prices?

Answer: we'll have to cut back.

analysis...the question was loaded because in deflation PRICES GO DOWN>

next onto a small shop, where deflation means less income.....

if it wasnt so stupid, it would be funny.

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RPI shows a 0.8% increase. The government use slight of hand as they now index tax thresholds, NI, and other taxes by CPI, but still use RPI to index tax amounts like VED. Trouble is, most people don't notice and there are not enough that do to worry the politicians at the ballot box.

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BBC are on the case.

Lunchtime news went to a Suffolk NHS pensioners club...

Question: How do you expect to cope with no increase in your pension, yet deal with rising prices?

Answer: we'll have to cut back.

analysis...the question was loaded because in deflation PRICES GO DOWN>

next onto a small shop, where deflation means less income.....

if it wasnt so stupid, it would be funny.

Yes, utter drivel isn't it. Surely it's obvious to anyone with a brain that deflation benefits retired folk on fixed incomes.

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Yes, utter drivel isn't it. Surely it's obvious to anyone with a brain that deflation benefits retired folk on fixed incomes.

Yes people on fixed incomes should be jumping for joy at deflation.Notice the triple lock means state pension goes up 2.5% while everything else locked at 0%.

No doubt they will need to keep pushing the age back you can get it to keep those retired with more disposable income every year.

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An important month as it would normally feed through into various benefit upratings. Well not the triple locked pensions.

Not sure on business rates. Maybe he'll jack up by2% prior to the new planned changes.

Edited by Ash4781

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George is right in your quote above.

Falling prices is not the same as a 'damaging' contraction of the money supply. Not immediately and maybe never.

However, falling prices and loss of pricing power can impact on profits increasing the risk of default....and in that way transmit to the credit extension of banks and the broad money supply.

I think you are right. But why is Telegraph reporting it as deflation?

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It is a bit confusing - Is the UK in deflation or negative inflation?

For example balloon: Can you negatively inflate it until is empty? Or positively deflate it until it burst?

Edited by rollover

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They won't bother with inflation figures in the future because there will be no need to buy anything. People won't be let out of work and the corporation will supply basic living needs. After their 20 hour shifts people will just go back to their lifetime mortgaged pods and eat their soylent green tablet.

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