Qualified advisers answering your
Financial Questions
call 0800 092 1245

Inflation or deflation, take your choice

News that core inflation in UK fell from 2.2% to 1.8% in June has been welcomed across the City but there are still fears for the future. Reduced demand in the food sector has seen prices fall with many experts expecting core inflation could fall below 1% in due course. However, when you add back in mortgage payments inflation is actually negative at -1.6% in June against -1.1% in May.

The issue of inflation/deflation is something of a double edge sword as we could see the cost of living in the UK fall further in the short-term yet suddenly spike up as and when the UK economy recovers. The next six months will be a very difficult period for the UK government and the Bank of England who will need to monitor all reports and signs regarding the cost of living in the UK and take the necessary action.

Many analysts believe that when the UK economy does finally spark back to life we will see UK base rates rise significantly in a very short space of time to offset the potential problem of inflation. However, this may occur six months down the line, one year down the line or may be longer depending upon the short to medium term performance of the UK economy.

Share this..

Related stories

Financial Guides

Financial Calculators

Our useful calculators can help you get your finances in order:

Latest News


Helpful new tax year facts that could affect you and your money

Blog | Seven helpful new 2016/2017 tax year facts that could affect you and your money. Our recent online blog shares a brief outline on how to stay up to date.

Read more

Useful Links

Popular Searches

Please Enter More Details

Enter More Details