The UK isn’t in deflation yet. While central bankers know what to do about stopping inflation, they don’t know what to do about halting deflation. The Swiss National Bank last week abandoned its attempt to defend a currency floor, which caused a sharp appreciation in its currency, which will exacerbate the deflationary forces it has already been hit by. This was largely a response to the prospect of the European Central Bank doing large-scale quantitative easing after a positive ruling on its legality from the European Court of Justice. This caused funds to rush into Switzerland from the eurozone, which has also ... (full story)