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Is zero inflation good?


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Probably best to enjoy it while it lasts. Years of QE has baked in inflationary pressure that somehow right now has a lid on it, mainly because the basis of the economy is still pretty strong. The more the underlying economy is stripped back through lack of investment, undermining of employment rights, diversion of income to rent-seeking non-productive activities like property investment and banking then the more difficult it will be to keep the genie in the bottle.

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Prices, as measured by the consumer prices index (CPI), fell by 0.1pc in the year to April, following zero inflation in February and March.

 

If wages match deflation, the economy will shrink too. Will benefits still match "deflation" ? Public sector pay ?

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