Inflation
EconomicsDefinition
Inflation is the rate at which the general level of prices for goods and services rises over time, eroding purchasing power. Central banks closely monitor inflation to set interest rates. High inflation typically causes a central bank to raise rates, which can strengthen the national currency.
Example in context
When UK inflation rose sharply to 11% in 2022, the Bank of England raised interest rates multiple times, which temporarily supported the British pound.
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