FURTHER to the last post on whether the authorities could or should attempt to solve the debt crisis via inflation, there is a new report from the respected Institute for Fiscal Studies on the British experience over the last decade.
The characteristic of recent inflation is that it has been concentrated on food and energy, two items which absorb a higher proportion of the spending baskets of the poor than of the rich. As a result, lower income households tended to experience higher inflation rates than higher income groups over the last decade. The worst rates of all were suffered by the single pensioners. The trends seem to have accelerated; the poorest quintile suffered an inflation rate of 4.3% between 2008 and 2010, the richest 2.7%.
Read Full Article »