Inflation Now Negative !

[mikey4444]

http://www.bbc.co.uk/news/business-32793481

We have been told constantly told, for many years, by political Parties of every flavour, that inflation is the great evil of a successful economy. But now that we have negative inflation, some people are saying that perhaps we really do need inflation after all !

Am I the only one to be confused by this ? For instance, I am paying much less for diesel now than I did a year ago, and I am very glad. But should I be campaigning for pump prices to go back up ?

Do the "pointy heads" really know what they are talking about ?

[Old_Geezer]

Some will tell you that you will wait until the last minute to buy things now because of anticipating a price fall. I don't think it has much affect personally. Regular purchases can only be delayed once and they they become urgent anyway. And if the difference is small who can be bothered ? I don't see this as being a big deal especially as I don't trust how the government works out these things anyway. Always something left out of their basket of purchases that turns out to be vital on the bills of you and me.

[mushroom25]

//But should I be campaigning for pump prices to go back up ? //

that depends whether you can put up with the present levels of congestion on the m4 and m5, occasioned because fuel is artificially cheap at the moment.

[New Judge]

Yes Mikey, OG is quite correct. Low inflation or slight deflation makes little difference to the man (or woman) on the Butetown omnibus.

Problems occur for individuals when high inflation takes a hold. The cost of goods and services rise considerably quicker than their income and they find it difficult making ends meet. For indebted governments (and to a lesser degree, indebted individuals) inflation is a Godsend because it erodes to real value of their debts. Deflation is a problem for the opposite reason.

There needs to be a balance and the UK government has an inflation target of 2%. This is manageable for most individuals and quietly erodes the value of government debt.

[mikey4444]

OG....I have never been known to keep driving around in circles, waiting for the pump prices to fall, when I am ticking on empty !

I have just returned from the Co-op, where I purchased a litre of milk, tea bags, and a wholemeal loaf...I suppose I could have put off buying these things until tomorrow, but I'm having scrambled eggs for tea, and I like a nice cup of Earl Grey with it. Seems to raise the tone of an ordinary mid-week meal somewhow.

Mush...according to Farage, all that congestion is due to Polish people, having the temerity to be in front of him on the Motorway.

By the way, when was the M4 and the M25 ever NOT congested ? Can't recall it myself !

[New Judge]

I'm not so sure that lower fuel values encourage people to drive, mushroom. Most people drive of necessity and a penny or two either way on fuel is unlikely to influence their habits significantly.

[Gromit]

The Osborne economic miracle continues apace...