If you delay your purchases because you expect prices to fall, this will happen but it will also reduce sales and profits for businesses who in turn cut costs, which usually means people lose their jobs.
Today the Office for National Statistics (ONS) reported that the Consumer Prices Index including owner occupiers’ housing costs (CPIH) 12-month inflation rate was 0.9% in April 2020, down from 1.5% in March 2020.
Falling energy and fuel pump prices resulted in the largest downward contributions to the change in the CPIH 12-month inflation rate between March and April 2020.
Rising prices for recreational goods resulted in a partially offsetting upward contribution to change. While prices and wages are falling as unemployment rises, existing debt becomes more expensive.
If you sit on your money for 6 months it’s unlikely to grow, at the time of writing this article the Bank of England base rate is 0.1%. Businesses are likely to stop investing in their people, innovation and technology and the future prospects for a generation is bleak.
Tax research LLP in a recent blog post predicts that "The reaction to this crisis (Covid-19) will not be a spending boom when the crisis ends. People will be living in fear for their jobs. They will save. And the result could very easily be deflation risk, despite the significant government spending now taking place".
The time value of money concept will devalue any savings you have in the bank but your existing debt will continue to increase over time.
However, if you choose to invest your money now, you have a realistic chance of a greater return on investment than you would get from savings in a bank.
Many savvy investors have already realised this and are investing in new start ups, especially those in the technology space.