inflation vs deflation - again, page-7

elm7,
Are you referring to this?
http://www.telegraph.co.uk/finance/economics/5196089/Deflation-could-scupper-UK-economic-recovery.html

If so, consider the source article here:
http://www.statistics.gov.uk/cci/nugget.asp?ID=19

Look at that graph.

Look at the CPI curve. Im seeing disinflation, not deflation. Prices are still going UP in the things that really count.

Now look at the RPI curve. Its falling through the floor. Journo's love this 'Chicken Little' stuff, it really sells newspapers. Now look at its cause, described in the text below the graph:
"...there was a large downward pressure from housing with the main effects coming from house depreciation, mortgage interest payments and, to a lesser extent, buildings insurance. All three of these components are excluded from the CPI"

This result reinforces my view that the deflation we appear to be having is in the falling valuations of assets that depend heavily on debt finance. Essential goods and services are still going up in price, year-on-year.