Price inflation: what goes down...

Shopper carrying shopping bags

It's 55 years since we last saw prices falling. It didn't last long, and nor is the deflation of prices announced this week by the Office for National Statistics.

Economists will tell you that deflation is generally a Very Bad Thing. Once people start anticipating that prices will be lower in future, they put off buying goods.

That sucks demand out of the economy, and you're into a vicious spiral. As Japan has shown over the past two decades, it's very hard to get out of that.

But economists are agreed that the latest ONS statistics are not a cause for concern. Not yet anyway. The fall in prices is explained by lower food costs, as supermarkets battle for our price-sensitive custom, and lower oil prices.

The purchase of neither food nor fuel is easily postponed. So the spending continues. If you look at new car registrations, they're doing very heathily. If deflation were about to take hold, we'd be putting off buying cars until the price drops.

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Jings! Crivvens!

SNP supporters cheer on general election night
The SNP secured 56 of the 59 seats available in Scotland

What's changed?

A lot.

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Shopping around

Sainsbury's store in East London

Britain's supermarkets continue to feel the pain from having to adapt to our changing behaviour.

Sainsbury's was the most recent one to report falling sales.

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Lubricating the oil cycle

Total's north sea oil rig

The oil price is on the rise again. Having fallen below $50 per barrel of Brent crude, it's currently trading close to $67.

So while drivers and oil-burning businesses find prices rising a bit (but well below levels seen last summer, when it was $115), is that the crisis over for the oil industry?

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More than merely paper losses

Tullis Russell product

Scotland used to be quite good at making paper. It fed a healthy demand, fuelled by all that world-beating literacy and education.

The industry is thought to have begun in Dalry, Edinburgh, as early as 1590. As a sizeable market for paper in government, publishing, commerce, the university and the law courts, the capital continued to dominate, with dozens of mills along the Water of Leith.

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Who to trust at Alliance Trust?

Electronic read-out of share prices along its front of the Alliance Trust building

You might not notice the big modern black box on Dundee's West Marketgait unless your eye is caught by the electronic read-out of share prices along its frontage.

It's just across the road from Debenhams and the Overgate shopping centre, but this isn't a building most Taysiders would take in on a day in the city centre.

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Go compare: Scotland's place in the world


Ronald Reagan got into the White House with the question: "Are you better off than you were four years ago?". So 35 years later, are you better off than at the last election?

Part of the answer is the highly contested issue of real spending power. Tories can tell a positive story using real household net income (including benefit and tax changes as well as pay), while Labour prefers to tell a negative story about squeezed spending power, using real earnings.

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Scotland's full fiscal challenges

British banknotes

That £7.6bn figure won't go away. Until now, that is. It now has companion numbers. And they're even bigger.

So £9.7bn may now become the big number that gets batted around the final two weeks of the election campaign - and beyond.

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Is your job a flexible friend or foe?

Jobcentre window

Something has gone surprisingly right about the jobs market. Even David Cameron is describing it as a "miracle" - generously ascribing to supernatural powers what other prime ministers might have claimed, at election time, as their own handiwork.

The most recent figures show 248,000 more people in work across the UK, when winter is compared with last autumn. At the same time, 76,000 fewer people were looking for work.

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Clydesdale woes worsen

Clydesdale Bank banknote

Mis-selling payment protection insurance? Which bank wasn't at it?

The compensation of customers has been providing a financial stimulus to the British economy far greater than any of the magic money tree promises coming from the political parties currently on the campaign trail.

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