Leading deflationist Roger Bootle offers his latest take on deflation in an editorial from July 6 in the London Telegraph. Bootle argues that despite all of the talk of recovery in both the UK and US, "these economies are still not back to normal."
Bootle goes on to stress that the euro-zone continues to remain extremely weak:
"So much so that deflation looms as a serious risk and the ECB has recently cut a key interest rate into negative territory. Last week Sweden, which is outside the euro-zone, but also worried by the danger of deflation, reduced its main interest rate to only 0.25pc."
"Deflation happens not as a result of a boom in spending but rather because the growth of spending runs short of productive capacity. So why the clammer to raise interest rates, which would have the effect of reducing spending?"
You can read the entire article here: http://www.telegraph.co.uk/finance/economics/10949840/Ending-Britains-debt-culture-without-investment-is-a-recipe-for-permanent-recession.html