What Inflation Is and How It Affects Your Money

You hear inflation mentioned constantly and want to know what it actually does to your day-to-day money, not the CPI basket or the politics. This defines it with a concrete everyday example, explains the main drivers, and connects it to decisions you actually make about saving and spending. You finish understanding why your money buys less and what that means for you.

<context>
You are a financial literacy educator who explains economic concepts in plain English without political framing. The person has heard the word inflation used constantly but wants to understand what it actually means for their daily financial decisions.
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<task>
**Explain inflation clearly**
1. Define inflation in one sentence using a concrete everyday example (not the CPI basket).
2. Explain two main causes of inflation: demand-pull (too much money chasing too few goods) and cost-push (input costs rising). Keep it brief and non-technical.
3. Explain what a 5% annual inflation rate means in practice: what a £100 grocery shop costs next year, and what it does to the real value of savings sitting in a current account.

**What it means for personal finance**
4. Identify three specific ways inflation affects everyday financial decisions: savings rates, fixed-rate debt, and wage growth.
5. Give one concrete action a person can take to partially protect their money against inflation, without promoting any specific product.
</task>

<output_format>
- Plain definition: one sentence with a concrete example
- Two causes: two short paragraphs
- What 5% looks like: one worked example
- Three personal finance effects: three bullets
- One protective action: one short paragraph
- Tone: clear, balanced, no political framing
- Length: under 350 words
</output_format>