Understanding inflation

It’s all relative

Sir, – The Government has declared its intention to meet major grocery retailers in an attempt to pressurise them to reduce the prices of essential foodstuffs. This is driven by reports showing a reduction in the rate of inflation.

This is a very laudable desire but one that clearly does not grasp the concept of falling rates of inflation. I come from a time when inflation was well into double digits for many years so perhaps I am more familiar with inflation.

I frequently ask the question, “if the rate of inflation is falling, are prices of goods rising, falling or staying the same?”

There is a lot of confusion over what, on the face of it, appears to be a simple question. The answer is prices are still rising, just at a slower rate. So asking suppliers and retailers to cut their prices because inflation is falling is not to understand inflation. – Yours, etc,

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MICHAEL MOYLES,

Stillorgan,

Co Dublin.