What are the Costs and Consequences of Inflation

-Inflation will have Standard of Living on those with Fixed [ish] Incomes to Fall - Bigger on Lower Income or Benefits -Country’s Exports will be more Expensive and Imports Cheaper. This can increase Unemployment and create a Deficit in the Balance of Payment -Saving is pointless as the Value always falls so it is more attractive to Spend - which just leads to more Inflation -This means [Less Saving] that funds for Borrowing and Investment decreaases which means Firms can’t Improve. Interest rates going Up [Combat Inflation] also Reduced Investment which can create Uncertainity for Firms