Inflation is a way of reducing debt


Because inflation is, essentially, the rate at which the value of money falls.

Rising inflation means £1.00 will buy you less as inflation increases. This is because the price of goods are increasing but the power of your £1 is remaining the same. If You have a lot of debt, and the value of each pound is falling, then the effective “value” of your debt is falling – and it becomes easier (and cheaper) to pay it off in the future.

This can be countered by high interest rates, but some debts surprisingly do not have these added! • ⚠️⚠️ this is not an excuse to ignore your debts as this can have consequences.⚠️⚠️

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