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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

#791
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…

Its always someone else's fault, no matter what. I mean, the current laws of physics are just a conspiracy to benefit the rich. Congress just needs to pass a law making everything free without limit.

When you point your finger, there's three point back at you

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

#792
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…

You are talking like inflation is some conspiracy wielded by “the rich” (who are they? Are they all friends with each other and plan all their schemes together?) against the “others”. Fact is the inflation we are seeing here is caused by the after effects of Covid, the Energy price surges caused by the Ukraine war and in the special case of UK - Brexit, which has lead to huge import shortages due to increased bureauc…

Someone is always profiting from inflated prices. I suspect it's not the poor.

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

#793
post #670

Earlier quoted context omitted.

>1. Interest-free money for businesses to launch, grow, and advance. This leads to more goods in the market and thus lower prices We tried that. It all went into real estate and stocks and gave birth to a massive scam industry involving crypto and other get rich quick schemes as the world is full of stupid people and opportunists. The average joe didn't see much trickle down to him unless he was already invested in r…

Exactly this. And it’s not anecdotal either. In the UK, 75% of that new money goes to asset purchases[1], that’s likely a similar number in the US. Chronically low interest rates is a wealth redistribution program to the ones who get the biggest loans (guess who). The legend of the honest guy who needs a tractor or a fishing boat may as well be a mythical creature. At least giving money directly to poor people is spe…

> Chronically low interest rates is a wealth redistribution program to the ones who get the biggest loans

What's the mechanism? A big loan is a big risk. With a big risk you can have either a big reward or a big failure. Smaller loans, smaller risks, smaller rewards and smaller failures. It's proportional. Why do you think of wealth redistribution?

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

#794

Earlier quoted context omitted.

The lower class does suffer the most, but unfortunately it is the policies intended to help them which actually cause most of the problem. By giving money to people without producing more stuff - or even making it harder to produce the same - you MUST have inflation, rationing, or empty shelves - and often all three. The solution to allowing lower classes to have more stuff is to make it easier for everybody to produ…

This seems to come from the same place as the argument of "trickle down economics". Yea no, I've seen similar things done in Japan with abenomics (with one of the targeted goal even being more inflation; without achieving it) and studies show it doesn't work. Those spending never reaches the "lower classes", and seldom even reach places where it would have the potential to increase productivity. It's a tired, old arg…

"Trickle Down Economics" is a talking point of those who oppose whatever it is that they want to attack at a given moment.

It can, and has at times, meant:

- Corporate bailouts and "welfare"

- Tax cuts

- Deregulation

- Lobbying / big money donations

Sometimes it means some of the above, other times it means all of the above. But the point is that no one on the fiscal conservative side of the aisle has ever come out and used the term "trickle down economics." Their opposition uses that word because it is loaded and it speaks to their base.

> Those spending never reaches the "lower classes"

What spending are you talking about? The OP was talking about removing barriers to creating business and attributed these barriers to good intentions. We can probably safely assume that the OP is a fiscal-conservative who favours deregulation and a business-friendly environment. And for what it's worth I am not trying to take one side over the other, you just lost me at "spending." The OP is talking about the exact opposite of spending. They are taking a "private solutions over public solutions" position. One where you spend less by having less overhead and red tape standing in the way of those who want to produce goods & services thus creating abundance of supply which lowers prices in addition to more jobs which puts more money in peoples' pockets.

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

#795
post #723

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.

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.

Wealth taxes, unlike most taxes, would be inflationary because they force selling assets and therefore increase monetary velocity.

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

#797

Earlier quoted context omitted.

The fix is to produce more stuff. It's that simple. It might not be easy though. It would require us to focus on production, remove barriers, streamline regulations, encourage and actively celebrate production. It seems these days we're ambivalent toward the production of stuff, or even antagonistic to it in many cases. So we have less stuff. Combine this with giving people more money and you get inflation.

There's no incentive to produce more stuff if you can just price gouge your current supply for equal or more profit with less manufacturing investment. Especially for necessities like electronics or food where your entire supply will be sold regardless. You might say there's then an incentive to undercut, sure, but if you undercut too much you'll be left with no inventory as the rest of the manufacturers decide on fi…

Why not? Surely if you can get away with price gouging, then you would want to price gouge on more stuff, right? Of course, there are diminishing returns here, because as you produce more stuff, you might be able to gouge less and less. But certainly there must be some max-profit equilibrium higher than the current price, if you are already able to gouge.

Price gouging usually leads to producing more stuff, if it goes on long enough and you are allowed to produce more.

Healthcare is an example where this doesn't work, because you aren't allowed to produce more stuff. You can gouge all you want, but can't provide any additional quantity of services. (See: Certificate of Need laws in the US)

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

#798
Most food packaging is made with aluminium. Aluminium is down 30% YoY but up 50% in the past 3 years. It's been a wild ride for manufacturers and they increased prices to handle this. Same with energy, the average cost is 50% up from ~3 years ago. Not just electricity that powers up the factories, but the oil for everything logistics.

If you're Unilever/P&G/Nestlé, what do you do? You start cutting costs (less/worse materials - that's called skimpflation), total production volumes or less volume per product (shrinkflation). You also are not as inclined as before to give out promotions and benefits. The good old "pay 1 take 2" is now "pay 1 take half". Retailers get squeezed because they can't just pass the whole price raise down to the end customer, so they suck it up a little and get less profits. They also had more operational costs, so they get screwed (mostly the people working there). The smaller ones may shut down or get M&A'd, the big ones survive.

To make matters worse, the world is simply unpredictable right now. Post-covid you would expect some categories would go up (deodorants, for example), but then you have a war in Ukraine and a global rise in interest rates. When managers can't predict they go with the worst-case scenarios in their pricing strategies, reinforcing all that's bad.

Personally, I'm saving what I can, investing in inflation-indexed bonds and the occasional "buy the dip" for some select stocks, freezing cooked foods with a month in advance, and being very cautious with any job movements. I hope I'm wrong but I believe that will be the way to go for at least a year, if not more.

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

#799
post #723

Earlier quoted context omitted.

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.

Wealth taxes, unlike most taxes, would be inflationary because they force selling assets and therefore increase monetary velocity.

Both income and point of sale taxes definitely feed into inflation so I'm not certain why you're trying to draw a distinction between those taxes on productive money and taxes on accumulated wealth (generally unproductive money).

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

#800
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.

The gap between living standard of poor and rich is much smaller than a few hundred years ago. What you claim cannot possibly be correct.
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