What is inflation

Inflation is the persistent increase in price of goods and services in the economy from one time period to the next. 

So take a chocolate bar which cost you £1 last year, now costs you £1.10. The inflation is 10% because the price has risen by 10%. This is a key instrument used by the government to understand how stable prices are in the economy. 

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Answered by Varad H. Economics tutor

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