Life Becomes Just a Little Bit Simpler

For the first time in my lifetime there was no inflation in the month of February. Of course the prices of some things rose but the prices of other things fell and as far as people can measure by the Retail Prices Index the rises cancelled out the falls and that means some other “firsts” such as

  • Any money people had deposited in the bank in real terms increased in value, because UK banks are not yet charging negative interest; mostly money in the bank in the past fifty years has decreased in value after taking into account inflation interest and taxation on interest
  • Saving now becomes more sensible than borrowing for younger people, at least while there is no inflation
  • Future interest rate rises are unlikely while there is no inflation
  • Life becomes just a little bit simpler.

 

 

 

2 Responses

  1. If the overall neutrality is due to a drop in petrol prices, then soon after the election VAT and petrol duty will rise.

    Soon after that there will be an escalation of the war in Ukraine and Syria/ middle east causing oil prices to drastically rise.

    Simple!

    • I fear that you are probably right. I do not think there will be an escalation in Ukraine. I do fear an escalation in the war against ISIS. It is not a war we can win, unless we win the hearts and minds. our strategy is simply the same strategy that failed in Syria, Iraq, Afghanistan and Libya and made matters worse in those places.

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