Definition
- Disinflation
- Disinflation is a fall in the inflation rate that leaves it above zero, so prices keep rising but by less each year than before.
Example
Can you think of an example of disinflation?
UK inflation falls from 8 per cent to 3 per cent. A £100 basket now costs £103 a year later, not £108: prices still rise, more slowly.
Test yourself
Can you name the three terms, other than inflation itself, for how the price level can behave?
Learn it properly: the module
Also in: The costs of inflation and deflation