Inflation

Inflation

A sustained increase in the general level of prices within an economy, resulting in a decrease in the value of money.

Consumer price index

A measure that calculates the weighted average of prices for a basket of consumer goods and services.

Disinflation

A decrease in the rate of inflation, causing prices to rise at a slower pace.

Deflation

A decline in the general price level within an economy, characterized by an inflation rate below 0%.

Hyperinflation

A period of extremely high inflation rates, often leading to a loss of confidence in a country's currency.

Inflation rate

The annual rate of change in the average price of goods and services.

UK inflation target

The UK government's goal to maintain an inflation rate of 2% using the consumer price index, promoting steady economic growth.

Bank of England's Monetary Policy Committee

Responsible for controlling inflation and ensuring that inflationary pressures are managed to meet the inflation target over a two-year period. They adjust the base interest rate to influence interest rates across the economy.