Is inflation going to soar?

amistupid

For months now the media have been stating that interest rates were being held to control inflation. Now that the Bank of England has been "forced" to cut rates is inflation likely to soar. I keep hearing "It's recession or inflation" can anyone explain this in simple terms.

1694

amistupid wrote: »

For months now the media have been stating that interest rates were being held to control inflation. Now that the Bank of England has been "forced" to cut rates is inflation likely to soar. I keep hearing "It's recession or inflation" can anyone explain this in simple terms.

Hmmm it might just hit an awkward balance, though I doubt it, food will prob go up.

THose with money to spare will take it out of banks and buy up the now cheap assetts, property shares etc. (low interest rates why save it) and this will reduce not only the initial amounf of money in circulation but also the loans that could be creatd of this if it was a bank deposit.

wombat42_2

As commodities are currently depressed, inflation should be depressed short term but long term inflation is likely to reignite what with low interest rates, huge amount of money in circulation to pay off debts, etc

Transalper

For months now the media have been stating that interest rates were being held to control inflation. Now that the Bank of England has been "forced" to cut rates is inflation likely to soar.

That is what usually happens. But with shares going down then bouncing up and down like a tarts drawers I think we will have to wait until something settles before we can put a label on what is happening or predict what will happen.

colin79666

The significant reductions in the oil price might balance out the affect of the lowering of interest rates on inflation - here's hoping anyway.

project500

I recon we have more to fear from Deflation ,its started in houses and will work its way through to commodities and wages as the recession tightens its grip .

Most prices will go down not up

amcluesent

Inflation is being used by CLown as policy now, mostly to erode the gargantuan public sector debt. It's the bank who hate inflation most, and they are hardly in a position to complain!