Low Inflation
Inflation is a sustained rise in overall price levels. Moderate inflation is associated with economic growth, while high inflation can signal an economy heading into trouble. ... As a result, the rate of inflation increases. ... This is when Hyperinflation takes place Inflation is sometimes described as “too much money chasing too few goods;” in other words, as spending outruns the production of goods and services, the supply of money in an economy exceeds the amount needed for financial transactions. ... At this point, the rate of inflation usually drops. Such a period of falling inflation is known as disinflation. Disinflation can also result from a concerted effort by government and policy makers to control inflation. The Monetary Policy Committee in England is responsible for the control of rate of Inflation that the government sets. The Inflation target set by the Labour party in England is around 2. ... Inflation poses a threat to investors because it chips away at real savings and investment returns. ... Inflation puts this goal at risk because investment returns must first keep up with the rate of inflation in order to increase real purchasing power.