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MT Focus - How coronavirus is hitting inflation
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MT Focus - How coronavirus is hitting inflation

And how our tastes have changed in the last year

Qin Xie
Jun 15, 2020
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Share this post
MT Focus - How coronavirus is hitting inflation
moneytalk.substack.com

Hey, what’s on your mind?

Inflation, the subject of this month’s MT Focus, is what’s on mine. If you already know what inflation is, skip straight onto the fun stuff: how inflation affects our daily lives, what’s changing in our “basket of goods” and how coronavirus has affected it.

The technical bit…

What is inflation anyway?

Inflation is defined as the rate at which the price of goods and services increase year on year - you’ll experience it as the cost of living increasing or decreasing over time.

Economists like a healthy bit of inflation (hence the Bank of England’s 2% target) because it shows growth in the economy. But if there’s too much, the cost of living spirals out of control - you may remember this as what happened in Germany after WWI. And if there’s too little inflation or even deflation, it’s an indicator we might be moving towards a recession.

The Office for National Statistics (ONS) provides three separate measures for inflation each month: Consumer Price Index (CPI), Consu…

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