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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

#741

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…

> Make it easier for people to sell stuff, and there will be more stuff.

This is an excellent idea. Just lower the barrier whatever that barrier is.

Some people can think that lowering the entry barrier can result in subpar products and services but in fact the higher the competition, the higher the quality will be.

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

#742

Post by carlosjobim »

clnq wrote: post #47
illiarian wrote: post #29

Meanwhile in Sweden the CEO of ICA, the largest supermarket chain in the country (53% of the market) said yesterday: "It is actually the consumer who controls what they are prepared to pay for a product. In the end, it is they who decide." https://omni.se/icas-vd-det-ar-kunderna-som-avgor-matpriset/...

In an ironic way, the consumers decided to leave the EU and expose the UK to higher inflation. Though much of the world has been seeing severe inflation at this time, it would have probably been better if the UK had access to a broader food market.

Being outside of the EU gives you access to a much broader food market than being within the EU.

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

#743

Post by adventured »

TheOtherHobbes wrote: post #679
vuln wrote: post #615

Earlier quoted context omitted.

Has this ever successfully been accomplished and if so where? Thanks!

The biggest growth period in the Western world - after WWII - happened to coincide with enthusiastic social spending programs, aggressive government funding of new R&D, and very high tax rates. In the US the rate peaked at 91% on earnings over $400k - which is about $4m adjusted.

I often see the arguments made about how the US didn't suffer from the 90% tax rate. Those same arguments universally and intentionally ignore the elephant in the room: the US was the prime industrial power left standing in pristine shape after WW2 and largely inherited the globe accordingly. The US stepped right into being globally dominate in manufacturing, which produced a temporary, artificial prop for the middle class of gigantic proportions. That can't be repeated today and it wasn't the high tax rate that helped make things so great for the middle class.

This is also why middle class tax rates are so high in Nordic countries, and most affluent nations with good social welfare structures. Taxing the rich isn't nearly enough. The US would have to shift to a much higher tax system for everyone, and the US middle class (which is spoiled by relatively low income tax rates) will not go for it (not yet anyway).

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

#744

Post by hdhrufjdi »

nerddadnear40 wrote: post #214
hdhrufjdi wrote: post #123

Only a sneak preview to what the future holds as temperatures rise and rise

Complex issues have complex causes. A scapegoat is a convenient way to dismiss discourse but it's not very useful.

I am not dismissing any discourse

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

#745

Post by supernova87a »

On the topic of whether inflation hits the poor harder than the rich, I have been undecided/inconclusive in my mind about this. And would love some perspectives on it, along the lines of:

Although day to day items that dominate the spending of a lower income person's paycheck are easily seen affected when inflation hits, for a wealthy person, whatever savings and money is accumulated eventually has to be spent on such things also -- whether directly by the owner, or through goods/services that have to pay such expenses.

So in time, in having to spend their wealth, the rich get affected by shrinking buying power as well. (they just have the luxury to spend on more items that are not daily/monthly subsistence expenses)

Is that reasonable to think?

Why am I getting downvoted for such a legitimate economic question? Is this offensive against lower income people?

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

#746

Post by jodrellblank »

prox wrote: post #516
louwrentius wrote: post #500

Earlier quoted context omitted.

Why so convoluted. Just tax the rich (companies) properly. The resources and money is available. The current government chooses not to allocate it properly. What is happening in the UK is to me 100% the result of the current Conservative Party and their policies.

Tax the rich and they go somewhere else (see recent discussions about the wealth tax in France)

Good? It's not like they're using that money to enrich the country they live in or the other people or society, they're not building hospitals and funding schools anymore or employing people or raising wages. They're buying assets and becoming landlords and lobbying politicians and making things worse. Not just 'let them go', get rid of them, let them be somewhere else's problem.

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

#747

Post by jhallenworld »

prewett wrote: post #712
jhallenworld wrote: post #572

Earlier quoted context omitted.

The rises are due to a power dynamic: the companies raising the prices can basically get away with it ("whatever the market will bear"). Why can they do this? One reason is monopoly power- monopolies must be broken up. But what else can be done (besides central bank driven demand destruction)? So instead of price controls, a more palatable solution is collective buying. This gives buyers more clout, allows them to ba…

Grocers are typically a commodity business, one feature of which is that the companies do not have pricing power. So unless the grocers have increased their net profit margins, I don't think evil-powerful-corpos is a tenable answer. It's a nice simple, market-based answer that gives people someone to blame, but it's just wrong for grocers. Target has a NET 2.6% profit margin, Walmart has 1.9%, which are on the low si…

Where is the money going then? A few big suppliers according to this:

https://www.theguardian.com/environment/ng-interactive/2021/...

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

#748

Post by uptownfunk »

The summary is that productivity is down, money supply is way up. The value of money, in particular, the strength of the US Dollar is backed, fundamentally, by the strength of US and US productivity. The problem is that the money printed did not sufficiently go into factors that increased productivity (relative to the money printed) and instead contributed to an asset bubble and consumption (relative to investment in productive capacity).

Unfortunately, the Fed has to raise rates to reduce the money supply (increase the cost of borrowing) which puts downward pressure on productivity. This is not a foregone conclusion but is the likely outcome, hence the need to "do more with less" mantra of tech.

So while the money supply will decrease, the real question is will the money supply decrease relative to productivity. Otherwise, we are basically in for a stagflationary period unless technologies like LLMs produce a step-function increase in productivity and efficiency.

The problem is there is also an inverse relationship between productivity gains due to technology and effort. Meaning technology makes life easier, so people work less, effectively resulting in the same overall output, unless economic conditions dictate otherwise. In which case, inflation may not be a bad thing in the very near short term, provided we can produce our way out of it, which may be possible if LLM technologies result in new industries and job opportunities. (However current thinking indicates the opposite, jobs will likely be eliminated as a result of LLM technologies.

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

#749

Post by G3rn0ti »

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.

Correct. Being rich is always better than being poor no matter what the economic context is. Even Marxists should be able to understand that.

Although, to be precise: Inflation hurts everybody maintaining their savings in some form of cash. Rich people with a large pile of cash also have a lot to lose.

In the medium term current retail prices will be offset by wage increases as long as inflation does not become a galloping inflation.

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

#750

Post by mixmastamyk »

PathOfEclipse wrote: post #570
benlivengood wrote: post #492

Earlier quoted context omitted.

https://www.epi.org/productivity-pay-gap/ shows that producing more stuff per person since 1978 hasn't fixed inflation (not graphed there), and we can afford less of it because real wages haven't kept up.

Inflation is primarily caused by governments increasing the supply of money: https://www.hoover.org/research/inflation-true-and-false . Inflation was fixed in the U.S. when Reagan became president: https://www.pacificresearch.org/beating-back-inflation-team-... Recent studies in fact show that wages and productivity are still linked: https://www.aspeninstitute.org/wp-content/uploads/2019/01/3.... And, finally other a…

When Volcker was appointed by Carter. Also oil prices had been dropping for several years.
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