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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

#541
post #116
post #92

Earlier quoted context omitted.

If wholesale food costs have gone up and they're simply passing that on then they may not be making any more money. Here's wholesale food prices in the US: https://fred.stlouisfed.org/series/WPU578101 In fact you'd expect reduced sales from the higher prices to put pressure on profits. That is what seems to be happening in the UK: https://www.grocerygazette.co.uk/2023/01/31/food-companies-p... But not in the US, wher…

It's both increased wholesale food costs and price gouging. Profits have never been higher all along the board. Everyone in the chain is "passing the cost on" and also taking a little extra cut.

right out of the oil industry playbook.

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

#542
post #520

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…

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I never see libertarians here.

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

#543
post #528
post #516

Earlier quoted context omitted.

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

The wealthy in the UK are largely landed gentry. They can't flee with their property and if they sell it off at firesale prices to ordinary folk to avoid being taxed that would largely solve the housing crisis. The problem wouldn't be that they would leave. The problem would be that they would stay and become violent.

https://www.thetimes.co.uk/sunday-times-rich-list

Eyeballing this, only 11 of the top 50 richest people in the UK have property as their source of wealth.

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

#545
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…

What I want to know is what kind of bread costs 4 pounds?

For people not in the UK: bread at a supermarket costs a quarter of that.

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

#546
post #345
post #311

Earlier quoted context omitted.

Consider the comparison between Norway and Sweden, two extremely similar countries in almost all respects. Food inflation in Sweden is 22.1% over 12-month [0] Food inflation in Norway is 8.8% over 12-months [1] Obviously someone is making money hand-over-fist from this 12.7% discrepancy. Comments like the one above are really disruptive to any constructive conversations. It is not a conspiracy. The comment above is (…

Norway and Sweden are hardly similar in this respect. Norway is a net food exporter . Sweden is a net food importer . That alone can account for much of the discrepancy.

[deleted]

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

#547
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…

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 companies are often too locked into existing price structures and competitive markets. Additionally, anyone with fixed-denomination assets (bonds, bank deposits) sees the value of them decline in real terms since the dollar is worth less.

The main winners of inflation are:

Adaptive over passive. As you mentioned, the average blue-collar wage growth always lags behind inflation. We aren't really seeing white-collar wage inflation either in the U.S. right now though - fast food workers are making $22/hour and Amazon drivers $18/hour, but FAANG engineers are getting laid off. Who are the winners then? The people who swap jobs or swap industries into ones with pricing power, or who found new businesses enabled by changing price structures. What we're seeeing in the U.S. now (with ~5% wage inflation) is that the 80% of wage earners who stay put at their job are getting ~0% raises, while the people switching are getting ~20% raises.

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.

Governments over citizens. Partially this is because of government usually being a net debtor if it gets into a position where inflation happens, and partially it's because of the government's power to issue new currency. Plus tax revenue is usually a percentage of economic activity, so if all prices & wages increase by a certain percentage, so do tax revenues (and the government can bracket-creep you into higher tax brackets).

Poor people usually fare worse than rich people because of the adaptive vs. passive bulletpoint - they have fewer options and less awareness of options than richer people do. But the debtors-over-savers effect works in their favor: poor people usually have higher debts than rich people, and inflation is a form of debt jubilee. If, for example, they jump into a fast-growing new business started because of inflation (like Microsoft or Apple Computer in the 70s) it could be their ticket out of poverty.

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

#548
post #343
post #196

Earlier quoted context omitted.

In the US, M2 increased 70% in 2 years. Of course prices are going up. Anything less than a 70% increase means companies have a ways to go to catch up.

This chart https://tradingeconomics.com/united-kingdom/money-supply-m2 has UK M2 declining from its peak in September 2022 (the two month Liz Truss government). It doesn't match the inflation chart.

> It doesn’t match the inflation chart.

and i don’t think you’d expect it to. the increased supply needs to hit the market first. depending on how that money is distributed, that could take a long time. also remember that QE has been central fiscal policy in the UK and US since basically 2007. and it’s safe to say that concentration of this wealth is.. very high.

> has UK M2 declining [..]

it becomes a bit more sobering when you look at the full scale on that graph (when the y-axis starts from 0). it’s a metaphorical deck-chair-thrown-off-of-the-titanic amount of decrease.

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

#549
post #520

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…

[flagged]

Price controls are equivalent to welfare payments, except instead of being handled by an at least theoretically accountable government, the responsibility is imposed on random third parties with no oversight. Unsurprisingly, most of those third parties decide they'd rather keep their wealth instead of selling at a loss.

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

#550
Living in the UK, yes food prices are rising. But I work for an NGO whose main focus is in East Africa and I've been tracking food inflation there and seeing 200-400% jumps over the past three years.

Perfect storm of the lack of available fertilizer, wheat shortage and poor growing seasons over the past five years is hitting everyone. I don't see it geetting better until the world adjusts; swapping to alternative crops and producing nitrogen fertilizer at country level.

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