It seems like a world away now, but the 1970s and 1980s both saw periods of double digit inflation, where prices rose at one point in 1975 to nearly 25 percent.
How any economy could function like this seems a mystery, until the obvious answer presents itself - Britain’s economy didn’t function under this burden, strikes, chaos and by 1982 over three million unemployed.
Ah, the good old days.
It rather puts our recent difficulties into perspective, whilst we have had a tough time as a nation since 2008, prices have remained stable in some areas and fallen dramatically in others.
We are in a period of deflation and whilst this might be bad news for manufacturers or property developers who hope for high prices for their goods and services, it is certainly good news for consumers.
It is good news for everyone willing to take advantage of the opportunities that deflation offers. This article is a quick examination of some of the ways you can benefit from our deflationary economy.
It is suggested by independent financial advisors that a review of ones mortgage deal every three years is advisable.
If you are approaching a point whereby it is time to consider the mortgage once again, it might be worth remortgaging with a different provider.
If you are currently wondering ‘how do I reduce my mortgage payments?’ now might be a good time to explore your options.
Whether you choose to take out a fixed rate deal or a variable rate or some other kind of mortgage deal with your new provider, the current market is, to some extent, geared towards the buyer.
Obviously we no longer live in the carefree days pre 2008 when questions like ‘and how will sir be repaying that home loan’, seemed petty and banal.
The irresponsible lending of the boom years is long gone and good riddance, now there are stringent and forensic surveys of a borrower’s ability to pay, but if those criteria are satisfied, interest rates on mortgages are lower than they have been for decades.
Where do I invest for growth?
The declining cost of fuel has had a remarkably positive effect on a whole range of companies (except the oil companies, of course).
Road hauliers, food manufacturers, construction businesses and the car industry have all seen their balance sheets improve over the last few months.
This means that their dividends have also improved and therefore investing in shares where overheads decline in cost can be seen generally as a good idea (though it goes without saying that the value of investments can go down as well as up and you might not get back what you put in).
In a period of time when the cost of borrowing, property and fuel are low, it is almost a given that other consumer goods and commodities will see their prices reduce.
You can normally get a good gauge for the price competitiveness of the economy as a whole by looking at the bargains on websites like eBay, Amazon and Groupon for example.
This isn't a licence to go mad and by the jacuzzi you’ve always wanted (though you can if you want), but our sage suggestion is that you use the opportunity to find bargains that will add to your overall financial well being.
Investing in your home, buying an essential but costly item for your business or investing in a second property all might seem beyond your means normally.
However, in the current period of deflation it might be worth exploring whether these items are significantly more affordable.