If I have a small mortgage would a period of high inflation be good for me?
My payments would go up, but eventually my wages would rise following inflation also. So after a few years my morgage relative to the inflated price of my property and salary would in real terms be much smaller than if there were low inflation.

Have I missed something ?

Yes.

The big thing you have missed is how companies achieve higher wage settlements.

They achieve it by redistributing their wage burden amongst fewer staff, IE those that dont get sacked.

As for the public sector, the budget defecit is going to go WAY above 40%, the "golden rule" (even though it doesnt include student Debt and PFI). Not that LAbour are worried of course, because by this time next year, the UK will be in recession and the game will be up. I am betting on Gordon being ejected from office as a vote of no-confidence, snap election and the Tories in power by Crimbles. (and you all though my house price crash ideas were barking!!!)

The other point is that the US, despite being on the edge of recession, are already talking about raising rates later this year, to purge inflation. We will have to follow, or we will see £3 a litre at the pumps, as the pound will get slaughtered against the dollar, further raising the spectre of inflation in this country. Either way, it aint pretty.

DIY, to be honest, IF (its a big IF mind) we get your high wage inflation,you dont lose your job, house prices dont collapse 30%+ (looking fairly likely now in my opinion and you had a whopping mortgage, then of course wage inflation is going to help. Unless IRs go up, your payments would stay the same and your wage growth would lessen the burden.

But you will be paying £10 for a chicken, £6 for a packet of snap, crackle and pop and paying a fortune at the petrol pump (if you think prices at the mo are reasonable, just wait and see what inflation is going to do to oil prices before they come back down again).