Definition of disinflation

Disinflation is a sustained slowing down in price increases (in the rate of inflation). Disinflation is not to be confused with deflation, which is a sustained fall in prices.

 

disinflation in the news

In January 2014 the Eurozone confirmed that disinflation was underway with core inflation, excluding food and energy, running at 0.7 per cent in December, a new low. An FT writer commented that the most dangerous period, so far as investors are concerned, is just before deflation strikes which is when shares tend to plunge in anticipation. 

 

However, a commentator from HSBC on January 1 2014 said that the best way for UK households to start feeling better off would be if the UK was to join the disinflation club.

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