Ever wondered why prices always rise? Watch our inflation explainer in the Big Money Questions show
It’s a common cliche that older people seem to go on about how much cheaper everything was in ‘their day’ – a loaf of bread for 20p, £10 a month wages in their first job…
But it’s not just nostalgia; prices do tend to go up most years due to inflation.
Not only that, but inflation is deemed so important that controlling it is the primary job of the Bank of England.
If inflation strays too far off target, the Governor of the Bank of England has to write a letter to the Chancellor of the Exchequer explaining what’s going on.
On the latest episode of the Big Money Questions economist David Miles, professor of economics at Imperial College and former monetary policy committee member at the Bank of England, explains what inflation is, why it’s important and how it’s kept under control.