Inflation was once defined as "undue increase in the quantity of money". Such increases usually occurred when governments resorted to the printing presses. The effect, after a delay of a couple of years, was a generalised increase in all prices. Nowadays, inflation just means an increase in prices of a basket of goods and services included in some index or other, such as the retail price index or the consumer price index. Governments have a vested interest in choosing an index which shows a low figure, especially as pensions, savings and benefits are linked to the selected figure. It is unfortunately the case that housing costs have been excluded from the UK indexes for several years. Had they not been, the higher inflation figures revealed now would have shown up long ago. Now those high housing costs were indeed caused by an undue increase in the quantity of money, but it was not money created by government but by the banks. Eventually, this money will be paid back but that...
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