In addition to higher consumer prices which especially harms lower income households, inflation has the following harmful macroeconomic consequences:

The impact of inflation on businesses To compensate for inflation, staff may ask for pay rises above the rate of inflation. If inflation is higher in the UK than it is elsewhere, then the UK’s goods become comparatively more expensive. This leads to a fall in the demand for the UK’s goods .

A higher inflation rate also helps homeowners who bought during the peak of the real estate boom and now owe more than their home is worth by building equity quicker.

• Higher interest rates.
• Lower exports.
• Lower savings.
• Mal-investments.
• Inefficient government spending.
• Tax increases.

Inflation is defined as sustained increase in the general price level in the economy over a period of time. It has overwhelmingly more negative effects for decision making in the economy and reduces purchasing power. However, one positive effect is that it prevents deflation.

Example of Inflation One of the most straightforward examples of inflation in action can be seen in the price of milk. In 1913, a gallon of milk cost about 36 cents per gallon. One hundred years later, in 2013, a gallon of milk cost $3.53—nearly ten times higher.

Negative effects: If costs are rising due to inflation, a business may not be able to pass them onto customers (PED) Inflation can disrupt business planning and lead to lower investment. Rising inflation is associated with higher interest rates – this reduces economic growth and can lead to a recession.

So if you are asking will general price inflation ever stop, then the answer is not as long as there is a US Dollar unbacked by nothing but confidence, and whose value is exploited by the FED to finance our big Government spending. Because inflation favors the holders of Dollar denominated debt.