Business Terms and Jargon Explained
What is Inflation
This is where prices rise over a period of time due to growth in the economy. As the economy grows there is more demand for products and the amount of money in the economy increases but at a lesser rate. E.g chips ten years back were on average 70p a portion, now the price is �1.10 per portion.
The figures for inflation are given periodically usually annually to be used for comparison purposes. This is a benchmark for the economy. The benchmark for inflation is the Retail Price Index (RPI).
Saving and returns on investments need to be more than inflation if the increase is to be real.
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Term created / updated 2005-07-16 23:12:15
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