Inflation is unlikely to flare up again as long as commodity prices remain depressed. Inflation helps countries, companies and households that have high debts to pay them off because it reduces the value of the debt, so without it the world is slowly walking into a debtors’ nightmare.
The price of oil has fallen victim to market uncertainty following the Greek referendum. The Brent international crude prices have fallen below $60 a barrel, with a drop of more than 6% recorded on Monday, the biggest intraday fall since February 4 according to the Financial Times.
The paper says oil is headed for a bear market, and some analysts watching the commodity agree that the price of oil has further to fall.
Ever since the Conservatives came to power in 2010, austerity has dominated the UK budget. It was a policy introduced to reduce the yawning budget deficit, which made the country vulnerable to attacks from the bond vigilantes.
Russia will fall into a deep recession following the ruble’s collapse and the sharp decline in the price of oil, and will drag down with it many other countries in the region this year, new forecasts from the European Bank for Reconstruction and Development (EBRD) show.