Debtors gain from inflation because they repay creditors with dollars that are worth less in terms of purchasing power. 3. Anticipated inflation, inflation that is expected, results in a much smaller redistribution of income and wealth.

Who benefits from anticipated inflation?

Lenders are hurt by unanticipated inflation because the money they get paid back has less purchasing power than the money they loaned out. Borrowers benefit from unanticipated inflation because the money they pay back is worth less than the money they borrowed.

Who does inflation affect the most?

People on low incomes have suffered higher inflation than those on higher incomes in the past decade, according to a study by the Institute for Fiscal Studies (IFS). The IFS said the difference in fortunes had been particularly marked since 2008, with pensioners on state benefits especially hard hit.