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The Rest Is Money
84. Why inflation hits the poorest hardest
Aug 14, 2024
Dive into the complexities of inflation as it disproportionately affects low-income households, driving home the concept of 'cheapflation.' Explore the implications of rising rental costs and the pressing need for affordable housing solutions. Discover the challenges of reporting economic news while balancing engagement with tradition. The podcast also discusses the potential outcomes if we let inflation run its natural course and the ongoing debate around monetary policy's role in economic inequality.
36:42
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Quick takeaways
- Inflation impacts lower-income households disproportionately, with essential goods seeing higher price increases, highlighting the struggle of 'cheapflation'.
- Soaring rental costs in urban areas necessitate government intervention for affordable housing construction to alleviate financial pressures on tenants and businesses.
Deep dives
Current Inflation Trends
Recent inflation data indicates that UK inflation has risen slightly to 2.2%, lower than economists' expectations of 2.3%. This figure, while still above the Bank of England's target of 2%, marks a significant decrease from over 11% in October 2022. The importance of this lower inflation rate is highlighted by the fact that the Bank of England governor will not need to address the Chancellor to explain a failure to meet targets, as would be required if inflation were to rise above 2.5%. The anticipated stability in inflation rates brings the potential for interest rate cuts, which could lead to lower costs for mortgages and improve financial conditions for borrowers.
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Discover
highlights
Listen to the best highlights from the podcasts you love and dive into the full episode