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UK: Food inflation rises to 18.2% as it hits highest rate in over 45 years

grocerygazette.co.uk

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Re: UK: Food inflation rises to 18.2% as it hits highest rate in over 45 years

#721

Post by ihaveabeardnow »

have consumers increased their exposure to rising costs by consuming fewer raw materials and more finished goods? instead of buying flour, eggs, butter, cocoa powder to make a chocolate cake - they just go buy the cake. and I recognize there's an entire spectrum of stages each raw material goes through to get to the final finished product. each of those stages though is an attack vector for cost increases (legit or malicious - doesn't matter)

having the skills/knowledge to consume fewer finished products is insurance. and the only real price for that insurance is time.

Re: UK: Food inflation rises to 18.2% as it hits highest rate in over 45 years

#722

Post by supernova87a »

ochoseis wrote: post #499
samhuk wrote: post #167

As a person living in the UK, I have definitely noticed a considerable rise in unit prices. One of many examples is that a loaf of my favourite bread increased from £3 to £4 recently, which was a shocker. Toilet roll prices, as ever what the news loves to talk about, has exploded, increasing by around 70% since 2020 by my anecdotal observation. A sad thought I have about inflation is the fact that it is, wittingly or…

It is said that inflation (caused by money printing at least) is a hidden tax on everyone, which definitely hits the poor more than a progressive tax scheme would.

I forget a famous economist (old British guy I think) who said that there is no more effective way to secretly and insidiously overthrow / disrupt a society as unchecked inflation.

(something similar to that, I'm probably paraphrasing badly)

Re: UK: Food inflation rises to 18.2% as it hits highest rate in over 45 years

#723

Post by ak_111 »

Bukhmanizer wrote: post #685
samhuk wrote: post #167

As a person living in the UK, I have definitely noticed a considerable rise in unit prices. One of many examples is that a loaf of my favourite bread increased from £3 to £4 recently, which was a shocker. Toilet roll prices, as ever what the news loves to talk about, has exploded, increasing by around 70% since 2020 by my anecdotal observation. A sad thought I have about inflation is the fact that it is, wittingly or…

I just want to point out that pretty much every natural economic condition is beneficial for the rich. The thing about money is it’s very flexible. You can hoard it in deflationary cycles, spend it on assets in inflationary cycles, grow it in economically good times and buy cheap property and goods in economically bad times.

Thing is inflation isn't 'natural' economic condition, it is mostly a product of economic policy according to a very respected school of thought (monetarism). In other words it is as natural as slapping a wealth tax of 80% on the super wealthy, which is definitely not beneficial for the rich.

Re: UK: Food inflation rises to 18.2% as it hits highest rate in over 45 years

#724

Post by justincormack »

jrockway wrote: post #603
samhuk wrote: post #167

As a person living in the UK, I have definitely noticed a considerable rise in unit prices. One of many examples is that a loaf of my favourite bread increased from £3 to £4 recently, which was a shocker. Toilet roll prices, as ever what the news loves to talk about, has exploded, increasing by around 70% since 2020 by my anecdotal observation. A sad thought I have about inflation is the fact that it is, wittingly or…

The winners from inflation are anyone with debt. If your mortgage was equivalent to 1000 loaves of bread yesterday, and it buys 500 loaves of bread today, you just got a bunch of free money. This assumes wages keep pace with inflation; at the very low end of the spectrum (minimum wage) they probably don't, but for professionals, it seems like everyone has gotten inflation raises over the last couple years. Other than…

UK wages have not risen with inflation over the last year or so. Private sector wages went up about 7%. Public sector less.

Re: UK: Food inflation rises to 18.2% as it hits highest rate in over 45 years

#725

Post by prewett »

TheOtherHobbes wrote: post #702
justsocrateasin wrote: post #420

Earlier quoted context omitted.

IIRC deflation and inflation are equally as bad. If 'inflation' rates are negative, the economy grinds to a halt. Having an inflation rate of ~2% is widely considered to be beneficially for everyone, since it's in a 'goldilocks' zone, it creates stability. Inflation of 4% sure isn't as good as 2%, but generally speaking the inflation rate in the UK appears to hover around 2-3% during "stable" periods. https://www.mac…

Curious that there's been so little financial stability in this supposedly stabilised ideal system.

Stability is a feature of industrial processes. Natural processes are all over the place. Also, there are external shocks that you can't control (e.g. oil producers raising prices in the 70s, Russia invading Ukraine, etc.).

Compare pre and post 1945. The 1800s had a depression every banking cycle, now we just get recessions. Bank failures no longer take down your life savings. The king of England doesn't sometimes surreptitiously start putting copper in the gold coins to fund wars any more (e.g. inflation). GP's chart is pretty impressive, actually. Aside from the 70s oil shock, inflation is pretty constant, especially in the last couple decades.

Re: UK: Food inflation rises to 18.2% as it hits highest rate in over 45 years

#726

Post by mycodebreaks »

Silverback_VII wrote: post #715
Bukhmanizer wrote: post #685

Earlier quoted context omitted.

I just want to point out that pretty much every natural economic condition is beneficial for the rich. The thing about money is it’s very flexible. You can hoard it in deflationary cycles, spend it on assets in inflationary cycles, grow it in economically good times and buy cheap property and goods in economically bad times.

It's like Monopoly, at some point there is just nothing you can do. The resets are probably the collapses of civilizations.

good point, assets aren't infinite.

Re: UK: Food inflation rises to 18.2% as it hits highest rate in over 45 years

#727

Post by boc »

legitster wrote: post #114
boc wrote: post #35

Demand for food is inelastic, so it makes sense that companies are raising prices as high as possible since people still have to eat. Generally this leads to price competition from other food brands, but when single companies own dozens/hundreds of food brands it’s easy to act like a cartel and keep prices high.

This is a pretty lazy narrative. Prices are rising even in non-branded goods and markets. Smaller retailers are not-undercutting the bigger retailers. Couscous and margarine and eggs being more expensive across the board at the supplier level. This does not speak to any sort of cartel behavior.

I appreciate the feedback, but I think it's unhelpful to dismiss what I said as "lazy". I have an economics background and am certainly not a "blame corporations" reactionary.

Companies are smart. When news gets spread far and wide about a shortage of eggs or other products due to disease or wars or "supply chain issues", they leap to take advantage of this consumer consciousness by increasing their prices, knowing the consumer will blame the larger macro factor and not the company. This has been well-documented, even in cases where the supply chain issues didn't actually impact the company that raised prices.

The best way to understand what's happening is via corporate earnings calls. They're upfront with their strategy when talking to investors.

For more info I'd recommend listening to this episode: https://www.bloomberg.com/news/articles/2023-03-09/corporate...

Re: UK: Food inflation rises to 18.2% as it hits highest rate in over 45 years

#728

Post by DeathArrow »

somenameforme wrote: post #662
theturtletalks wrote: post #590

Earlier quoted context omitted.

His argument is that the government can do 2 things: 1. Interest-free money for businesses to launch, grow, and advance. This leads to more goods in the market and thus lower prices 2. Free money straight to the people which means more money in the market and thus, inflation, empty shelves, etc. His general point is that having interest-free money keeps existing players honest since newcomers can come in and start a…

The US has had extremely low interest rates for a very long time, and yet effective competition is further than ever in many industries. Something I'd observe is how unreasonably difficult it can be to legally sell things in the US. For instance hitting on this topic (of food prices), why can't I simply start baking bread and selling it? You can make an amazing loaf of bread for a tiny fraction of what people pay in…

> For instance hitting on this topic (of food prices), why can't I simply start baking bread and selling it?

Excessive bureaucracy and excessive legislation have the perverse effect to seemingly protect the consumer while in reality helping the big players. Small players will go out of business while new players can't enter. It wouldn't be much surprise if powerful lobbies ask for such legislation while they pretend they think of the public good.

No one likes competition, even entering the bar as a new lawyer is difficult.

Re: UK: Food inflation rises to 18.2% as it hits highest rate in over 45 years

#729

Post by adventured »

DeathArrow wrote: post #717
theturtletalks wrote: post #590

Earlier quoted context omitted.

His argument is that the government can do 2 things: 1. Interest-free money for businesses to launch, grow, and advance. This leads to more goods in the market and thus lower prices 2. Free money straight to the people which means more money in the market and thus, inflation, empty shelves, etc. His general point is that having interest-free money keeps existing players honest since newcomers can come in and start a…

With interest free money, people will just borrow money and spend them massively which will raise inflation. Just what happened in the US with very low interest rate or in EU with negative interest rates.

Borrowing + consumption doesn't in particular generate inflation.

Debt is a heat sink, which is why Japan failed to spur inflation for two decades despite pulling every spending lever they could come up with. Debt kills economic dynamism, robbing the economy of the capital it requires to invest, expand.

To get to inflation out of borrowing + consumption, you need supply to not keep up. For most of the prior two decades for the US, supply kept up (courtesy of the China manufacturing juggernaut, which was a deflationary force for US consumers). The China effect has reached its end in terms of peaking, the next two decades will not see that kind of offset benefit (at least for the US).

Over the coming decades, the US will see similar problems that Japan did in terms of being unable to spark expected levels of inflation, despite high spending and debt problems. The cause will be the same, more and more of the economy will be locked up in the freezer as debt (typically yielding ever lower interest, in a downward spiral).

Re: UK: Food inflation rises to 18.2% as it hits highest rate in over 45 years

#730

Post by ChuckNorris89 »

Bukhmanizer wrote: post #685
samhuk wrote: post #167

As a person living in the UK, I have definitely noticed a considerable rise in unit prices. One of many examples is that a loaf of my favourite bread increased from £3 to £4 recently, which was a shocker. Toilet roll prices, as ever what the news loves to talk about, has exploded, increasing by around 70% since 2020 by my anecdotal observation. A sad thought I have about inflation is the fact that it is, wittingly or…

I just want to point out that pretty much every natural economic condition is beneficial for the rich. The thing about money is it’s very flexible. You can hoard it in deflationary cycles, spend it on assets in inflationary cycles, grow it in economically good times and buy cheap property and goods in economically bad times.

Basically, when times are bad, the rich are solvent enough to afford to just "buy the dip", and sit on it to appreciate during the good times when rates will be low enough again, then rinse and repeat between the boom-bust cycles to increase wealth.

Inflation helps them as their assets are inflation-proof and it helps wipe out their debd.

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