Food price inflation is now in double-digits
Fraser Nelson 1:32pm
Let’s quickly unpack today’s horrendous inflation figures. According to the Consumer Price Index, food inflation is now a staggering 10.6 percent year-on-year. I had previously predicted double-digit food price inflation by Christmas. But this double-digit rise in the price of food is concealed in today’s headline inflation figures of 3.8 percent CPI and 4.6 percent Retail Price Index – which factor in a 7.5% dip in clothing. In Cabinet today, Brown was expounding on his narrative that this is a global problem. But one of the biggest factors behind this is sterling’s loss of value – 13 percent against a trade-weighted index - which is of the same magnitude as on Black Wednesday. When your currency crashes like that, of course, you’ll notice it at the supermarket checkout.
Even today’s numbers are just the beginning. Yesterday’s factory gate prices, showed inflation of 30 percent and imported foods up 20 percent, this has yet to feed through to shop prices and will do by Christmas. From now until the election, we will be facing inflation on this scale.
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Hysteria
July 15th, 2008 1:44pm Report this commentI am so pleased our Dear Leader has eliminated Boom and Bust - goodness knows where we would be otherwise.................
Arthur
July 15th, 2008 2:38pm Report this commentSo I was an idiot to think it wise to save then?
Faceless Bureaucrat
July 15th, 2008 3:17pm Report this commentI'm not sure we can wait till 2010 - in terms of forcing a GE, what are Cameron's options here?
Michael Huntsman
July 15th, 2008 3:26pm Report this commentGlad to see the MSM has suddenly woken up to what the rest of us have been aware of for at least six months. The CPI & RPI are works to be filed under fiction. I blogged in December 2007 (http://tinyurl.com/5btozr) that inflation for necessaries was around 10%. It is now more than even the 10.6% cited above.
Brown's clinging to the CPI is at the heart of the public's rampant dislike of him: they know how their household gocery bills have been shooting up and they know he is lying through his teeth. He should not be surprised that he has totally lost the public's confidence, misplaced as it was in the first place.
Thomas
July 15th, 2008 3:46pm Report this commentWe urgently need to join the euro, at an exchange rate of around 1.50 (rather than the current 1.25)! It's the only sure way to bring down prices.
Chuck Unsworth
July 15th, 2008 3:47pm Report this commentAnd where is McCavity?
By all accounts he's off on yet another of his global tours this weekend. Does Milliband have anything at all to do with Foreign Policy?
'I will try my utmost'? Frankly his 'utmost' is simply not up to scratch.
TomTom
July 15th, 2008 3:58pm Report this commentSupermarkets have been busily pushing up prices for their executive bonuses and have been caught out as shoppers switch to Lidl, Netto and Aldi.
It is amazing that Aldi can supply quality food far cheaper than the British mainstream retailers which have gone overboard on retail temples instead of simple shops.
It is time for food retailing margins to drop to the German level of 3% instead of the 7% common in UK supermarkets
Mr Potarto
July 15th, 2008 4:03pm Report this commentSo the huge rise in food prices is masked by a large drop in clothes prices. This shows the limited value an inflation figure has.
When times are hard my family can keep wearing the same old clothes, but they can't keep eating the same old food!
seasurfer1
July 15th, 2008 6:36pm Report this comment"Astro Inflation" is inevitable.
Any intelligent investor will now place his cash in Land and Property, and borrow as much money as is felt comfortable with.
The only way the National Banks, led by the Federal Reserve, to save the Mortgage, Commercial and Clearing Banks is to PRINT MONEY. Yes Monetary policy is dead and good old Keynesian Economics is back.
The Pound will depreciate at a record rate due to this "Astro Inflation" and it could lead to either the end of the Euro or the Pound.
Craig Strachan
July 16th, 2008 6:02am Report this commentI see that Alistair Darling has again called for wage restraint. In an inflationary environment, this is in effect a request that people should accept lower living standards.
The appropriate response is "fine: we'll exercise wage restraint, you cut our taxes."
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