Jargon-watch: 'lowflation'

Falling prices the world over have given rise to a new word: 'lowflation'. But what on earth does it mean? Mischa Frankl-Duval explains.

By
published
in Features

15-1-8-shoppers-634

Prices are falling in the eurozone? That's "lowflation"!

Growth is slowing in emerging markets. Established economies can't getinto gear. Oil's down, again.

Prices the world over are falling. The global level of low inflation we're seeing is bad, but not half as bad as the word being used to describe it: 'lowflation'.

The term lowflation has gained traction due to "a shifting mindset in financial markets, as investors come to expect perseverant low or falling prices", said Quartz.

Article continues below

Try 6 free issues of MoneyWeek today

Get unparalleled financial insight, analysis and expert opinion you can profit from.

Start your trial
https://cdn.mos.cms.futurecdn.net/flexiimages/mw70aro6gl1676370748.jpg

Sign up to Money Morning

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Sign up

"When widespread, enduring price declines are seen to be the norm, it can spark a vicious cycle of falling profits, investments, jobs and income, which in turn further depress economic activity."

"The difference between that and deflation' is just a matter of degree."

Mischa Frankl-Duval

Mischa graduated from New College, Oxford in 2014 with a BA in English Language and Literature. He joined MoneyWeek as an editor in 2014, and has worked on many of MoneyWeek’s financial newsletters. He also writes for MoneyWeek magazine and MoneyWeek.com.