Do we really need to worry about inflation?
Amid concerns that the UK economy is set to downturn again after significant public-sector budget cuts and tax rises, many of now starting to question the 2% inflation target introduced by the Bank of England. So do we really need to worry about inflation?
The truth is that while inflation may not be top of the agenda at the moment, with more people concerned about the economic downturn and the jobs market, inflation does eat into the value of your money in real terms. The higher inflation the less your money is worth in real terms tomorrow and with UK savings rates at rock-bottom the impact can be dramatic for many people. So the truth is that we do need to worry about inflation, we do need to worry about the real value of money tomorrow and we do need to worry about the effect it will have on the UK economy.
If the Bank of England is pressurised into "taking its eye off the ball" with regards to UK inflation then we could actually be storing up significant trouble for the future. The credit crunch and resulting worldwide recession have literally ripped into the heart of businesses around the world and consumers are now paying the price.
Share this..
Related stories
PwC predicts possible double dip recession
A leaked report by PwC has today cast doubt upon the UK government plans to overhaul the UK banking system. The report was commissioned by major banks in the UK such as Barclays, HSBC and Royal Bank of Scotland and suggests that the introduction of new rules, to govern capital adequacy and banking liquidity, could actually reduce liquidity in the UK market place and push the UK economy back into r...
Read MoreCould Gordon Brown call a snap election?
While yesterday's announcement that the UK has officially moved out of recession was welcomed across the board, the disappointing growth of 0.1% was far less than analysts expectations of 0.4%. There is also a possibility that the figure could be downgraded in the short term as this initial figure is only the first estimate from the Office for National Statistics. There is growing speculation that...
Read MoreUK economic growth at four year high
Data released by the Office for National Statistics today shows that the UK economy grew by 1.1% in April and June 2010, nearly double analyst's expectations of a 0.6% increase. This is a welcome relief to the UK government at a time when budget cuts and investment issues are very much grabbing the headlines and taking away from the very difficult and very challenging situation which the UK govern...
Read MoreAre we looking at the worst UK recession since 1947?
Figures have shed an unfortunate light on the UK economy with a sharp fall in economic output forcing many experts to run for the history books. We now appear to be heading for the worst UK recession since 1947 with unemployment set to soar in the short to medium term. Despite literally billions and billions of pounds being pumped into the economy output continues to fall and confidence has not pi...
Read MoreIs George Osborne gambling with our futures?
As the dust settles on the coalition government's first budget there are growing concerns that George Osborne is gambling the future of the UK on an economic revival which some experts believe may not materialise. By reducing spending in the public sector, which in reality he was forced to do, this will have an impact upon the economy, as well as the increase in taxes which has not gone down well...
Read More