The costs of inflation and deflation

Prices that rise faster than pay cut what a household can buy

If every price and every wage rose by the same amount on the same day, nobody's buying power would change. In practice prices rise first and pay catches up later, often only once a year, so workers lose buying power in between and may have to fight for rises that keep pace. People on incomes fixed in pounds lose most. A retiree whose pension stays the same in pounds loses buying power every year, and over a decade or two the losses compound.