Inflation
A sustained rise in the general price level, not merely an increase in one product.
Plain languagePractical exampleConnected reading
01
What is it?
A sustained rise in the general price level, not merely an increase in one product.
02
Why does it matter?
It affects purchasing power, interest rates, company costs and asset valuations.
03
How should it be read?
Read headline, core, monthly and annual changes together with base effects and weights.
04
Common mistake
Confusing a lower annual inflation rate with falling prices, or deflation.
A simple example
Annual inflation can fall from 50% to 40% while the price level continues rising each month.