The news anchors are celebrating because inflation has fallen back to 2%. So why does your grocery shop still cost £150, and why is a pint of beer still £7?
This is the most common misunderstanding in economics. Falling inflation does not mean prices are falling. It just means they are rising slower than they were before.
We experienced a period of peak inflation near 11%. That means the baseline cost of living permanently shifted upwards. For prices to actually revert to 2020 levels, we would need 'deflation'—a negative inflation rate—which central banks actively avoid because it triggers recessions.
The only way to survive this permanently higher baseline is to increase your income and invest in assets that outpace inflation. If you leave your wealth in cash, your purchasing power is being eroded every single day.
You must negotiate your salary aggressively, and you must ensure your Tier 2 and Tier 3 wealth (your investments) are exposed to growth assets like global equities. Cash is only for emergencies; it is terrible for wealth building. Revisit the Liquidity Bridge strategy to ensure your cash allocations are correct.
Stop reading and start acting. Book a zero-obligation Chemistry Call to discuss how we can apply these frameworks to your specific situation.
