We should beware the fallacy that

[Robinho]

Inflation will go through the roof if/when the banks start lending again.

[Spacecadet]

Re: We should beware the fallacy that

No matter what happens, there will be those who gain and those who lose out

[Jeff Maginty]

..

[BrilloPad]

We arent seeing pay increases keeping up with inflation are we?

This is very true. But what happens if pay rises keep up with inflation?

[escapeUK]

Surely inflation will reduce debt and hence encourage growth?

Quite the opposite, inflation will reduce peoples disposable income. We arent seeing pay increases keeping up with inflation are we?

The only thing that is keeping some people spending is the fact their mortgage's interest rate is so low. That trick wont last forever. Nor is it helping those who rent, or who own their house outright or who are retired on a fixed income.

Edit:

I wrote this and then started reading the torygraph, predicting interest rates would rise next year.

http://www.telegraph.co.uk/finance/e...e-in-2013.html

[BrilloPad]

We should beware the fallacy that high inflation will help economic growth and unemployment

http://www.telegraph.co.uk/finance/9...our-peril.html

Surely inflation will reduce debt and hence encourage growth?