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Consequences of Inflation, Business confidence levels, Inflation reached…

- - - - Borrowers tend to gain from inflation as the money they need to repay is worth less than when they initially borrowed it.
  - - - During periods of inflation, fixed income earners(such as salaried workers and pensioners whose income does not change with their level of output) see a fall in their real income. Thus, they are worse off than before as the purchasing power of their fixed income declines with higher prices.
  - - - Inflation harms the poorest members of society far more than those in high incomes. Low income earners tend to have a high price elasticity of demand for goods and services. By contrast, those on high incomes are not so affected by higher prices
  - - - Employers are also affected by inflation because of uncertainty. Uncertainty and the lower than expected real rates of return on investment tends to lower the amount of planned investment in the economy.