Inflation rises to 2.7%

Points to discuss with Business and Economics students – Inflation… makes it difficult to predict future demand, costs and profit, because it distorts values; increases costs eg of changing price lists, brochures, accounts; can result in workers asking for more pay (which increases costs); can reduce profit margins – as costs increase (through cost push inflation); can make a business less competitive in terms of foreign products and markets –if prices are rising at a faster rate than a competing economy.