chapter  2
Pages 20

This chapter explains what inflation is, how it is measured and its causes. The publication of the latest UK inflation data is always big news in the financial markets with analysts using the data to try to second-guess what it might mean for monetary policy. Food inflation in Russia averaged 9.28% from 2010 until 2016, peaking at 26.1% in February 2015. Politicians tend to like a little bit of inflation as it encourages people to spend rather than save because it slowly erodes the value of money in one's pocket. This is good for consumer driven economies such as the UK. Hyperinflation is the term used to describe inflation that has spiralled out of control. Hyperinflation is often associated with wars and political or social upheaval. Germany suffered from hyperinflation after World War I. Consumer Prices Index Housing is a measure of UK consumer price inflation that includes owner occupiers' housing costs.