Thursday 5 March 2009

Food Inflation.

Just a quick look at inflation before the metaphorical printing presses run this afternoon.
The reason that we are able to print money today is because we have low inflation, will be Alistair's foundation for doing so, as we watch prudence's last fig leaf blow away.

Food inflation however, which has the biggest impact on households, rose 9% year on year. Non food fell 2%. The weak pound vs the euro is pushing more of our home grown food overseas, for higher prices. Farmers have seen a 36% increase in real incomes over the last year. Good news for them, less for anyone who shops..or buys food..or eats.

The 9% food increase {British Retail consortium} BRC figs shows a 1.9% increase across all sectors.

That hoped for Minus inflation figure is looking ever more fantasy.


Anonymous said...

Economic indicators show that inflation threats are right around the corner. Eric Fry of the Rude Awakening examines 6 ETFs and how to prepare for the “near-certain arrival of inflation.” He says now is the time to be wary of price increases and these ETFs act as an “insurance policy” to hedge against them.

Electro-Kevin said...

The guitar shop I visit reports that his new stock is to retail 20% higher in the next few weeks. I expect this to be the same for all imported goods.

We never did have low inflation btw. It was a lie promulgated on the exclusion of key items and the refusal to acknowledge that goods such as lightbulbs and matches (though remaining cheap) were getting shoddier.

Have you noticed how often you're changing lightbulbs ? They used to last for years.

Houdini said...

I like to keep a stash of cash handy for purchasing, how much is it worth now that the country is flooded with counterfeit Labour party notes?

Anonymous said...

e-k; yeah, Tesco lightbulbs are particularly short-lived.

Raedwald said...

We already import 51% of what we eat; a weak pound that encourages exports and raises this will rightly stoke inflation. The struggling classes - those for whom Gordon's 10p tax disaster was a painful personal disaster - are already seeing a real downturn in their standard of living. The £1.99 sliced loaf is closer than we think.

Claire Khaw said...

Followed you here from the Tom Harris blog.

has a few recommendations inviting your comments about what to do about single mums.

(a) deprive a single mother of child benefit if she cannot produce a marriage certificate
(b) fine the single mother for producing an illegitimate baby, say £1000, if she does not name the father
(c) require her parent(s) to pay this sum if she cannot or will not
(d) fine the father of an illegitimate child a sum of money, say £1000
(e) require the parent(s) of that father to pay this sum if he cannot pay it himself
(f) require that the mother give up the child for adoption before more lives are ruined

Jon said...

Interest rates must rise. Despite what the Deluded One wants or says, the market will drive them up.

That at least will provide some relief for savers -- many of whom are the elderly, for whom food costs are disproportionate. Trouble is, will savers get a real net return? I don't think so.

Bill Quango MP said...

Contrarian Profits. Commodities,Inflation beating savings products or the old faithful gold. Nothing about property in there though? also its interesting to a search on wine to hedge inflation. Seems to be a whole industry.

EK. Putting up prices today myself. It wasn't as hard a decision as I feared. The meeting went
* The cost price has risen
* We need to maintain margin
* Absorbing the cost won't shift more units.
* Allows a small area for future discounts/sales.
I would think that only very price sensitive items are being held down deliberately.

And EK - Dearieme. I had noticed that myself. Batteries that are dirt cheap now are also rubbish. On the index Batteries, bin liners, beans, light bulbs are all cheaper. But same quality are not as cheap.

Shame none of the News programs had that almost diesel sound large printers make, overlaying the news.even a photocopier noise would be good.
Its not the same with just the faint clack of a keyboard and an IT clerk turning to the chancellor and saying "£75 say ohhhhh kayyy! {tap..tap..tap} Thats done."

Raedwald. Part of the individual item sales data at the supermarkets is supposedly showing a decrease in pre packaged or ready made foods and an increase in ingredients sales. Tesco were saying they have never given out so many of of their free 'recipe/ marketing flyers. That may be partly why the 9% hasn't hit home yet.

Andromeda. Not sure of any of those. Seem very extreme.
People make bad choices. I wouldn't punish them for it, but I wouldn't reward them for them either.

Imagine if interest rates were to rise as quickly as they fell.
That's why Mrs BQ is begging me not to buy a new car but to stash spare {low interest rates gained} cash into accounts even at near zero rates.

Old BE said...

I call for a new currency. At least here it is not illegal to trade in foreign currency as it was until recently in Zim.

The Euro is the obvious one apart from that is about to explode. How about the Singapore Dollar?

roym said...

perhaps the cost of meat, which in its most industrially intensive form is a real blight on the planet and our collective health, was held too low for too long.

this might be a shot in the arm for the proper local butcher. Lord knows people need to reconnect with where their meat comes from and what value there is to be had from other cuts, instead of the pre-packed sliced and diced stuff.

without wishing to come over all Hugh-FW, but if youve paid a bit more, you're less likely to bin something just because its 5 minutes past what J Sainsbury says it should be eaten, and more likely to plan a bit better.

Mitch said...

So now they are using the faked inflation rate to justify more of browns madness.
Its a political tool that just keeps giving.(just like brown)

lilith said...

I just paid the same for a bottom-of-the-range tyre that I paid for a top-of-the-range tyre a year ago. Where is this bloody deflation?

Letters From A Tory said...

I thought food inflation was when you added an extra layer of cheese onto your burger.

Dick the Prick said...

N Power

Bill Quango MP said...

BE. I think Mexican peso will be the currency of choice. All part of our new, friends with the USA but no special relationship status.

ROYM . i think the closure of the small abattoirs has done great harm to local farmers. Luckily I have a local butcher and local supermarket doesn't do anything more than bacon.

Mitch. Indeed. Not even sure if he's the sharpest tool in that particular box..

Lilith. I can only assume the deflation was in the tyre you needed to replace?

LFaT. That will do it too.

DP. Nth Power

lilith said...

Quite so Bill

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