In today’s inflation report, Bank of England governor, Mark Carney, has covered all eventualities. Inflation may soon fall below zero, interest rates could be cut below 0.5 per cent, and oh, there’s also the possibility of inflation rising some time soon. Confused? You’re probably not alone.

All the while the central bank has stressed the “uncertainty” surrounding its forecasts, which is rather ironic considering that the whole point of forward guidance by the bank was to create more certainty around the future path of interest rates for businesses and consumers.

So, in the interests of creating some clarity, let’s focus on the certainties. Here are four things you need to know about today’s inflation report and what this means for your money:

1. Disinflation is not deflation

Mark Carney has made it explicitly clear that British inflation could soon go negative. But in his open letter to Chancellor George Osborne on this undershoot, Carney has also stressed that there is no need to panic because the UK is not experiencing deflation.

The reason why the headline inflation rate in the UK has fallen so dramatically is in large part down to the collapse in the oil price and the dramatic fall in food prices, driven by the UK’s ongoing supermarket price war.

The governor is right in that investors need to distinguish between disinflation – a slowdown in the rate of inflation and deflation – a persistent and ongoing fall in prices. The two are not the same thing and the Bank of England is confident that so far Britain has avoided the deflationary spiral Japan has been struggling to emerge from for the past 20 years.

The expectation from the Bank of England is that Britain’s ultra-low price growth should help the economy, as cheaper fuel and food puts more money in the pockets of consumers, in turn boosting real income growth.

2. Fair enough. But what if deflation does rear its ugly head?

That’s the good news. But regardless of Carney’s soothing words, many investors may still be nervous about the prospect of deflation. Deflation is dangerous because it causes companies and consumers to do the exact thing that causes more deflation – delay spending in the hope of further price falls in future.

It is worth remembering that both food and fuel (the main drivers of the fall in inflation) are two essential items. No-one is going to delay their weekly trip to the supermarket or stop filling up their car’s petrol tank, because they expect prices may fall next month. After all, you need to eat and get to work.

That said, if you believe the current rate of inflation in the UK is uncomfortably close to deflation, and want to shield your portfolio against this threat, look for companies with strong brands which benefit from pricing power. Companies which have a unique product and strong brand will be in a better position to increase prices regardless of the broader economy. Funds such as the CF Lindsell Train UK Equity Fund and the Fundsmith Equity Fund adopt this investment approach.

3. Don’t discount inflation entirely

The one clear message from today’s inflation report is that there are risks to the inflationary outlook in both directions. Deflation could be on the cards, but inflation could also rise. In the inflationary report the expectation is for inflation to rise above the 2 per cent target by spring 2017 and remain on a rising path1.

Inflation is the income investor’s worst enemy as it erodes the spending power of future interest and dividend payments. High inflation eats away at the worth of your original capital.

It may be prudent to add some inflation protection to your portfolio now, while inflation is still a distant possibility. This could be via an index-linked or inflation-linked corporate bond fund or an investment in an infrastructure fund. Real assets (those with intrinsic value) such as gold, agriculture and property are also good protectors against the wealth-eroding effects of inflation. You can invest in gold via a fund which invests in the shares of gold mining companies, such as the BlackRock Gold and General or Investec Global Gold Fund. The Sarasin Food and Agriculture Opportunities Fund focuses on owning companies exposed to themes within agriculture.

4. Negative interest rates?

Rising inflation of course gives the central bank more firepower to increase interest rates sooner than expected. But for now this seems a far way off. Indeed, the Monetary Policy Committee has not discounted the possibility of cutting the bank rate further towards zero from its current level of 0.5%.

In the past, the Bank of England made it very clear that it would not cut rates below 0.5 per cent, for fear of hitting banks’ profitability and willingness to lend. Now it says the banking sector is sitting on enough capital to withstand such a risk. So savers may soon have to contend with negative rates, meaning holding cash will make even less sense than it has for the past six years.