The current UK inflation rate is 2.7 percent. So what does this mean? The term inflation refers to a general rise in the price of a goods and services. This means the price of a basket of goods this year are, on average, 2.7 percent more expensive than last year. See Also: What is the Real Definition of Inflation? Costs of Inflation Most countries adopt a inflation targeting policy; for example, the Bank of England targets the inflation rate at 2 percent. Generally, governments prefer inflation so they can repay their debts with money that is worth less. If they had their way they would inflate their debts away at a much higher rate than 2%. So why is high inflation deemed a bad … [Read more...]