Too much inflation is a bad thing yet the opposite can be just as bad; reports released today show that the UK inflation rate fell to 0% in February, the lowest since records began, official figures show.
Reports are that lower prices for food and computer goods helped to cut the rate from 0.3% in January, official figures show, yet the lack of investment from the government in public services and in many cases real-terms cuts, has clearly had an affect.
February’s figure is the lowest rate of Consumer Prices Index (CPI) inflation since estimates of the measure began in 1988, a sharper drop than many analysts had expected, with most expecting a rate of 0.1%.
Ben Brettell, senior economist at Hargreaves Lansdown, said the UK “took another step towards deflation” in February.
“It looks likely the rate will drop below zero at some point in the coming months, and hover around zero for most of the year,” he said.
Clearly the right wing press will report that a deflation during these ‘trying economic times’ is a good thing, any deflation that lasts longer and deeper than the few months and low levels expected will have major implications for the economy, particularly in the still struggling manufacturing industries.
Just remember when voting at the upcoming elections in May, it’s not about the SNP, nor any other trivia that the tories have tried to lay at Labour’s door, but the economy that they have always claimed to be able to have control over. The way that it has swung over their tenure in the last five years shows that the tories have no more control over the economy than Gordon Brown did during the last collapse. The Tories have and always will only be in power for themselves and their cronies.