RE:how can inflation be at 7% the costs of every thingGreat question!
As I mentioned in earlier posts, Givernments changed the way inflation is calculated back in 1982. If you took the data today and used the old way inflation was calculated you would a number in the double digits.
To your point, since many government expenditures like pensions are indexed, a lower inflation numbers means lower program outlays to the detriment of those getting the pensions.