The declining rate of core inflation in many industrialized countries has raised fears of deflation. Will the decline continue or will the expansive monetary and fiscal measures taken to combat the recession begin to have an inflationary impact? The core inflation rate defined as the increase in the Consumer Price Index excluding food and energy is shown in the chart for Japan, the U.S., the U.K. and Germany. Japan continues to struggle with outright deflation. Core inflation in the U. S. and Germany continued to trend downward in January, but it has yet to show negative values in either country. The U.K. appears to be a bit of a surprise. Core inflation took a jump there U. K. in December and again in January.

The data are taken from the Haver Data Base, OECDMEI. This data base provides core rates of inflation, among other data, for the thirty members* of the Organization for Economic Co-operation and Development (OECD) and various regional aggregates. It is a convenient place to find comparable data for a diverse group of countries. .*Australia, Austria, Belgium, Canada, Czech Republic, Denmark, Finland, France, Germany, Greece, Hungary, Iceland, Ireland, Italy, Japan, Korea South, Luxembourg, Mexico, Netherlands, New Zealand, Norway, Poland, Portugal, Slovak Republic, Spain, Sweden, Switzerland, Turkey, United Kingdom, United States.