The Student Room Group

Inflation question

If inflation falls then does that mean food prices will drop back to what they were or does it simply mean they will stay where they were and rise more slowly? (If infation drops from 10% to say 3% in the next few months)
Reply 1
Original post by boulderingislife
If inflation falls then does that mean food prices will drop back to what they were or does it simply mean they will stay where they were and rise more slowly? (If infation drops from 10% to say 3% in the next few months)


Inflation is the tendency for prices to rise, therefore as long as the rate is positive prices will still rise. If it drops from 10-3% prices still rise but that is called disinflation (where the rate of inflation falls but is still positive.) hope that helps! :smile:
Original post by mxaxnner
Inflation is the tendency for prices to rise, therefore as long as the rate is positive prices will still rise. If it drops from 10-3% prices still rise but that is called disinflation (where the rate of inflation falls but is still positive.) hope that helps! :smile:


That’s sad to hear the price of my favourite foods will remain high :frown:. I will be eating less junk food as a result of the 10% inflation we’ve been seeing!

also, why is it that wages do not price with inflation? How do employers expect people to live properly when through no fault of their own we have to spend more of our pay packets feeding ourselves :frown:
Reply 3
Original post by boulderingislife
That’s sad to hear the price of my favourite foods will remain high :frown:. I will be eating less junk food as a result of the 10% inflation we’ve been seeing!

also, why is it that wages do not price with inflation? How do employers expect people to live properly when through no fault of their own we have to spend more of our pay packets feeding ourselves :frown:

Inflation is crazy at the moment sadly! The rates have fallen slightly recently so hopefully they keep falling.
Basically, in theory if you give people higher wages to match inflation then there’s more money circulating the economy as people can afford to buy more things and inflation gets worse in the long run.
Original post by mxaxnner
Inflation is crazy at the moment sadly! The rates have fallen slightly recently so hopefully they keep falling.
Basically, in theory if you give people higher wages to match inflation then there’s more money circulating the economy as people can afford to buy more things and inflation gets worse in the long run.


If people choose not to be mugged off by supermarkets (lot of prices are above inflation), then will supermarkets compete to slash their prices? I can’t get my head around why the prices will remain high when oil prices are falling? Surely it should translate to cheaper costs of making and transporting food? So doesn’t it follow that inflation should be going negative? Ie real terms price drop? What is keeping inflation positive?
Reply 5
Original post by boulderingislife
If people choose not to be mugged off by supermarkets (lot of prices are above inflation), then will supermarkets compete to slash their prices? I can’t get my head around why the prices will remain high when oil prices are falling? Surely it should translate to cheaper costs of making and transporting food? So doesn’t it follow that inflation should be going negative? Ie real terms price drop? What is keeping inflation positive?

There’s a few factors to do with how Russia and Ukraine are both some of the biggest providers for more things than oil like wheat which is keeping prices of food high
Fuel prices are falling but it’s such a tiny amount that it’s not really doing much to travel costs etc but yeah as they fall more and more hopefully other things will fall in price too but this is gonna be such a small amount
Interest rates are rising higher and higher at the moment to try and fix inflation and rates are falling slowly…
And in regards to the supermarket thing a lot of the typical budget supermarkets can’t afford to lower their prices because the costs are just rising and rising, and it’s unlikely everyone would stop buying food to force them to cut prices despite making potential losses

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