Petrol, up. Eating out, up. School fees, up. Everyone in Britain seems to be talking about price rises, but why then is inflation still so low?
Professor Brown gave the seemingly difficult economic issue a simply answer: It is the low-priced “Made-in-China” products that help keep inflation under control.
In his presentation at an economic forum, Brown reminded the price-sensitive Britons that Chinese-made commodities have not only helped bring down the inflation figures, but also made the already rich countries like Britain richer.
Consider the following figures. Over the past 10 years, the total cost of living in Britain, as measured by the official consumer price index, has risen by just 14 percent. But that very modest average increase has included high inflation in some categories: school fees, for example, are up 62 percent, hairdressing up 58 percent, holidays up 52 percent, and eating out up 33 percent on average, with top London restaurant prices showing much faster growth. Why then has the total cost of living remained so stable?
The answer to the question, the professor said, is not just interesting in its own right, but tells Britons a surprising amount about what is happening today not only in Britain but in the world economy as a whole.
Because the prices of mass-produced goods have been plunging: clothes prices down by 42 percent in a decade, shoes by 31 percent and consumer electronics by 63 percent.
Professor Brown said that this relates to China’s entry into the global economy. By becoming the workshop of the world, China has pushed down the prices of all mass-produced goods.
Keys: 1.F 2.T 3.F 4.T 5.T
