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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

#831

Post by reducesuffering »

withinboredom wrote: post #678

At this point, I feel like people are rising prices because everyone else is rising prices because “inflation.” Literally my wife raised her prices for haircuts simply because everyone else was and she was getting comments that she was too inexpensive.

Yes, there's absolutely a well-established phenomena that expected inflation will cause realized inflation. That's why the Fed (and likely other central banks) have to "break" inflation by showing they will get it back to 2% no matter what. If people believe inflation will be 2% the next couple years, it will help cause inflation be 2% the next couple years due to not causing the treadmill of price increases.

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

#832

Post by logifail »

mjevans wrote: post #682
somenameforme wrote: post #662

Earlier quoted context omitted.

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…

Safety, including healthcode safety, is a good thing. A level playing field ensures that everyone in the market is making safe, hopefully good quality, products for that market. Reviewing, streamlining, and creating easier for small businesses to follow guidelines about the regulations that exist in a given field also sounds like good ways of improving consumer choice and safety.

> A level playing field ensures that everyone in the market is making safe, hopefully good quality, products for that market

I don't believe "safe" and "good quality" are necessarily aligned. I live close to a dairy farm where they sell (their own) unpasturised milk. You bring your own bottle, fill it, and pay in the honesty box. The farmer has a (small) disclaimer suggesting that the milk be boiled prior to consumption, but I don't believe any of the local buyers actually do that.

Q: Should this be forbidden?

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

#833

Post by lo_zamoyski »

stuaxo wrote: post #777
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.

There is nothing natural about any system. The system is organised as it is entirely by choice - though only a small minority get to choose how it is. The system benefits those who get choose how it operates.

That's a bit extreme and relativistic.

If by "natural" we mean somehow rooted in or consequent to human nature, then economies are very much natural. Human beings are social animals, and within this social context, we exchange goods and services for mutual benefit and for the sake of the common good. Economies become unnatural to the degree that they are detrimental and depart from human nature, in which case they cease to be economies to the degree that they fail. The details of economic practices are subject to a great deal of prudential judgement, and regulation is but a prudential determination of general principles of human nature to specific circumstances.

Economies don't live in some abstract realm, of course. They are the sum of human exchanges which themselves are a product of individual choices themselves influenced by culture and law. When the law is used by those in power to exploit everyone else for their own (myopically understood) benefit, we call that a tyranny.

But to be able to judge any of this requires a clear grasp of what is just. Recall that justice consists in rendering onto others what is their due.

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

#834

Post by jorblumesea »

bonadrag wrote: post #816
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…

Amazing that you were able to bring class divide that inflation fosters without mentioning the major responsible for it: the government and central banks. In fact, inflation is, in its current form, a tax levied by the government on all citizens--rich and poor. You are correct that the rich can find ways to hedge some of the effects of inflation, but that's expected as the rich have way more disposable income. I just…

Wealthy, central banks, government are all a rotating and revolving door of interests. I don't understand why you're making a distinction. Who do you think the government acts on the behalf of? The wealthy.

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

#835

Post by lifeisstillgood »

bonadrag wrote: post #816
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…

Amazing that you were able to bring class divide that inflation fosters without mentioning the major responsible for it: the government and central banks. In fact, inflation is, in its current form, a tax levied by the government on all citizens--rich and poor. You are correct that the rich can find ways to hedge some of the effects of inflation, but that's expected as the rich have way more disposable income. I just…

I am a "believer"(#) in Modern Monetary Theory. So yeah I do think inflation is a choice by government - but only because they do not "believe" in the solution.

(roughly speaking the UK can print as much money as it has productive capacity, ie nurses or house builders, then pay those nurses to do something useful, then when there is too much money in nurses pockets and they go spending 4 pounds on bread, the government can tax the money back out of the economy. Either by taxing nurses, or you know million pound equity portfolios or billion dollar companies. The point is if inflation is too much money chasing too few productive capacity the government has a way to remove that money from the economy. How is the politics, but belief is the overton window)

Anyway, yes inflation bad. Solution is not to spend less but to tax more. Who you tax is a political choice. Personally Machine Gun Kelly is the brains here - rob the banks because that's where the money is. Tax the rich because that's where the money is.

(#) not sure what the right term is here. It seems so simple and obvious. But believer is close.

(might not be machine gun kelly)

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

#836

Post by bitL »

DeathArrow wrote: post #741
somenameforme wrote: post #662

Earlier quoted context omitted.

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.

If that was true... You might end up with mass bacterial infections everywhere as only those cutting standards while providing highly addictive products survive etc. There was a reason why those regulations started initially. Overburdening with new more and more expensive regulations might be the issue.

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

#837

Post by chr-s »

miohtama wrote: post #815
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.

Many, but not all: an example of unfavorable economic conditions for rich is real estate bubble burst (2008). Rich own real estate disproportionally to low and middle class.

How many rich people were foreclosed upon? The poor always feel the real brunt of any unfavorable economic conditions. The rich will stay rich and likely become even richer because they can take advantage of the recovery.

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

#838

Post by O__________O »

charlieyu1 wrote: post #830
O__________O wrote: post #827

Earlier quoted context omitted.

Pretending the UK did not intentionally decide to leave the EU, among other choices it has made, did not impact food prices is what it is. Related Google: https://www.google.com/search?q=did+brexit+impact+uk+food+pr...

France and Germany are also experiencing food inflation in double digits, surely you can't just blame Brexit as the big factor

Assuming you took a look at the search result I provided, but in case you missed it - “The OECD said last week that the U.K. is lagging substantially behind other developed economies, performing second only to Russia among the world's major economies.”; which is saying a lot given Russia basically committed economic suicide.

Source:

- https://www.cnbc.com/amp/2022/12/01/brexit-has-added-6percen...

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

#839

Post by nostrademons »

Gustomaximus wrote: post #802
nostrademons wrote: post #547

Earlier quoted context omitted.

Passive rich are usually severely hurt by inflation as well. One feature of inflation is that interests rates rise to cover expected future inflation. High interest rates = low asset values, since the value of an asset is the discounted value of all future cash flows and the discount rate goes up with prevailing interest rates. In theory companies' earnings should rise with inflation, but in practice existing compani…

> Debtors over savers. This is well documented in econ textbooks - inflation is a transfer of wealth from savers to debtors, because debtors can pay back their debts with less valuable money. Wouldn't this be true when interest rates are fixed only? People with variable rates will suffer as interest rates tend to spike during inflation and drive bankruptcy. Also given wages lag inflation, the debt cost proceeds the p…

The debt effect is true for the term that the interest rate is fixed for. So for a 30-year fixed mortgage, you lock in expected inflation based on the interest rate when you take out the mortgage, and if inflation happens to run above that, you profit. For a 7/1 ARM, you lock it in for 7 years, then the principal will have inflated away by some percentage, and then you're at the mercy of current inflation expectations. Bonds are usually fixed rate for the term of the bond (I-bonds excepted), which is why 10-year Treasuries have gone down so much relative to 90-day Treasuries.

Wages only lag inflation if you stick with one job. If you're forever job-hopping, you get the new wage as soon as you land the new job, which could be within weeks.

Yes, this means that you have an incentive to never do any actual work and instead spend the time immediately looking for a new job. This is one of the positive feedback loops that turns inflation into hyperinflation and state failure. With everyone incentivized to look for new work rather than do the old work they signed up for, no actual work gets done. This exacerbates shortages, which causes further price hikes, which increases inflation, which means people have even more of an incentive to take very short jobs and not do them. It also prevents the formation of capital stock - nobody can get good at a job, or train on some expensive piece of machinery, if they need to take a new job tomorrow. That's why there's this compression of time horizons in countries undergoing inflationary episodes, where everything becomes focused around surviving until tomorrow rather than building for the long-term.

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

#840

Post by thomasjb »

tmnvix wrote: post #735
Nifty3929 wrote: post #454

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…

> The solution to allowing lower classes to have more stuff is to make it easier for everybody to produce more stuff. So tax wealth rather than income?

Or you know, deregulate things? Things like allowing free import of cabbage seeds, removing restrictions on manufacturing in residential areas, letting folk build homes which are different to what the local urban planners envisioned?
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