24Mar/09Off
What does deflation mean
For savvy consumers, it means bargaining for the best deal and feeling proud to get better prices than last year. Accroding to Office of National Statistics Personal Inflation Calculator I've been living in deflation for a while.
For businesses though, this can mean making a challenging environment even worse. Once people get used to thinking that prices will fall, they postpone buying anything until they do. Which in turn adds to the economic problems.
This BBC article discusses what deflation meant for Japan in the 90's - just as the UK reports its first deflation in decades.