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Page last updated at 12:58 GMT, Saturday, 21 November 2009


For months now, economists have been warning about the danger to the UK economy of deflation, a decrease in the general price level of goods and services.

But now inflation is going back up.

For the first time since February, a key measure of UK inflation has risen. The Consumer Prices Index climbed to 1.5% in October, that is up from 1.1% in September.

Fuel prices, and the cost of second-hand cars contributed to the inflation figure.

So what is the outlook over the next few months? Will inflation become a problem, to be made worse by the rise in VAT in January, next year.

Money Box spoke to to Liam Halligan, chief economist at Prosperity Capital Management and Dan Redfearn of the Internet Advertising Bureau.

This item was first broadcast on Radio 4's Money Box on Saturday, 21 November 2009

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