Monday, November 24, 2008
My instincts still tell me that any defation will be very shot lived.
Money off everything! In a country that has made shopping its national pastime, the idea of persistent falls in the prices of all or most products and services sounds like the ultimate bargain bonanza. Yet in an economy already beset by dangers and difficulties on all sides, the emergence of just this trend – deflation – is rapidly emerging as the latest peril to Britain’s prospects. With the “R” word, recession, already a grim reality, now it is the less familiar “D” word that is provoking fear and loathing among economists and officials. Behind this alarm lies the knowledge that, although sustained falls in prices across the economy might seem like a dream for shopaholics, in practice this can swiftly become an economic nightmare.