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✦ KNOW PRIMARY · ECONOMICS · AGES 6 TO 11 ✦

PRICES
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Inflation is the name for when the same note buys a little less snack, a little less ride, a little less movie, year by year, on average, across the whole town.

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AVERAGE
Prices move up
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BASKET
We count the list
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DEMAND
Chasing the shelves
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RATES
Cool the room
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TARGET
Aim near 2%
📈 INFLATION EXPLAINED
TOPIC 03 · ECONOMICS · THE BASKET, CPI, AND THE CENTRAL BANK DIALS
PAGE 1 OF 5 · THE SHRINKING POUND (ON AVERAGE)
SAME COIN, SMALLER LUNCH
Same coin buying a smaller lunch today than it did years ago as prices have risen
INFLATION = THE AVERAGE PRICE STORY
Inflation is the name for the speed at which the general level of prices drifts up over time. It is not the price of one random sweet that wiggles on a Tuesday. It is the big picture: rent, bus tickets, band shoes, the lot, mixed in a slow average. If that average rises by about five in a hundred in a year, a thing that used to cost a hundred in the family budget story now costs about a hundred and five. The note in your hand can still be the same pretty paper, it just buys a smaller slice of life than it did for your grown ups at your age.
💡 TINY TRUE FACTS
At a steady three in a hundred a year, prices in that story about double in roughly twenty four years, because of a math trick with repeated tiny steps. Your pocket money number can stay the same, the town around it is just priced a bit higher each lap.
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NOT A MONSTER, A MEASURE
Cinema ticket costing far more now than decades ago, an example of inflation over time
🎬 OLD TICKET, NEW POUNDS
A cinema ticket that looked tiny in coins long ago can cost several pounds now. The screen is brighter, the seat is the same kind of fun. Inflation is the part of the story about money and time, not about you being naughty for wanting popcorn.
A CALM LITTLE PERCENT
Calm low inflation of two or three percent per year shown as a gentle upward slope
A two in a hundred or three in a hundred inflation story in a calm year is not the same as a scary spike on the news. This topic is here so you can tell the slow drift from the alarm bell, in plain words, before the long homework books find you.
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