goods inflation is definietly on the cards for the next 12 months or so - in the retail head office i currently work in we are increasing prices across the board next year.
VAT likely to be returning to 17.5% (VAT reduction has been the biggest joke - 99% of retailers increased their prices after 3 months and have been pocketing the 2.5% difference thank you very much) but this has meant they are going to increase prices next spring summer to countinue the profit growth they have had from the VAT. Also poor $ exchange all means that retailers are have profit margins squeezed next spring summer seasons - standby for price hikes and inflation (80% of goods from China, paid for in $)
But perhaps the goverment wants inflation with the amount of money they have been printing (debt) that debt will now be worth less in real terms? perhaps an economist can clear that one up for me, I am just a wannabe CPL!