Inflation stays below the Reserve Bank’s target

ISN’T LOW INFLATION GOOD?

Up to a point. Anyone who has lived through a period of high inflation will know it can be chaotic. Rapid price rises encourage people to speculate rather than making long-term decisions as there are so many question marks over future prices.

Economists and central banks see low inflation as more virtuous. It steadies the ship and allows people and businesses to plan for the longer term.

But if inflation is too low or becomes negative, it can slow