UK Assessment : Is Deflation a Real Risk for the UK?

Economics is known as the dismal science, and these are dismal times for much of the world economy. Business globally is struggling to recover from the worst international downturn for 20 years; manufacturing production across the major economies has fallen by 5% over the last two years, in large part reflecting the collapse of output in the high-tech sectors (computers, semi-conductors and telecoms equipment); equity markets worldwide are little more than half their levels two years ago; and, as discussed in the first of our feature articles, there is a real risk that military action against Iraq will only exacerbate these problems