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A primer on deflation
13th November 2008
One key aspect of the Bank of England’s Inflation Report published yesterday was the re-emergence of price deflation as a risk for the UK economy in 2009 and 2010. Deflation occurs when there is a sustained fall in the general level of prices and it is thought to be a major problem given the large amount of household debt. Larry Elliot has a useful primer on the economics of deflation in today’s Guardian.
More articles here:
BoE sounds warning on recession and deflation (Independent)
Britain in Deflation (Chris Dillow, Investors Chronicle)