Inflation and the cost of living appear to be closely related but they are not the same thing. By definition, inflation is the phenomenon of rising prices in general. The cost of living indicates how much a person needs to spend at any given time to maintain their lifestyle.
When inflation rises, so do the prices of goods and services, reducing people's purchasing power. "Inflation acts neither as Robin Hood nor as Robber Baron: neither the poor nor the rich are affected in a uniform way," economics professor David Piachaud stated in 1978.
It’s common to perceive inflation as "robbing" consumers of their ability to purchase certain goods and services. Maintaining price stability is important in order to maintain people’s wellbeing. Unfortunately high inflation is affecting economies everywhere.
