BBC: As per the Office for National Statistics, here's some more detail on that headline inflation figure.
- Rising prices for air travel, recreational and cultural goods and services, and second-hand cars resulted in the largest upward contributions - Falling prices for motor fuel led to the largest downward contribution - Prices for food and non-alcoholic beverages rose in May 2023 but by less than in May 2022
So the four largest contributors to the inflation stats, are all discretionary spending. Meanwhile food price inflation is lower, and fuel prices are actually falling.
Not great figures overall, but could be a lot worse. The worry now is that the inflation is showing itself to be sticky, which means interest rates up probably 50bps, and feeding into pay rises.
Politically, it is looking less and less likely that Sunak will achieve his target of halving inflation this year. And there will be another high triple lock increase to approve while working families struggle.
Starmer probably needs to spend less time campaigning and more time hiring economic advisors to help him work out how to fix our economic mess once he's in power.
BBC: As per the Office for National Statistics, here's some more detail on that headline inflation figure.
- Rising prices for air travel, recreational and cultural goods and services, and second-hand cars resulted in the largest upward contributions - Falling prices for motor fuel led to the largest downward contribution - Prices for food and non-alcoholic beverages rose in May 2023 but by less than in May 2022
So the four largest contributors to the inflation stats, are all discretionary spending. Meanwhile food price inflation is lower, and fuel prices are actually falling.
Not great figures overall, but could be a lot worse. The worry now is that the inflation is showing itself to be sticky, which means interest rates up probably 50bps, and feeding into pay rises.
Food inflation is past its peak but it is still way higher than the CPI rate. There is really not much of a silver lining on these figures this morning.
BBC: As per the Office for National Statistics, here's some more detail on that headline inflation figure.
- Rising prices for air travel, recreational and cultural goods and services, and second-hand cars resulted in the largest upward contributions - Falling prices for motor fuel led to the largest downward contribution - Prices for food and non-alcoholic beverages rose in May 2023 but by less than in May 2022
So the four largest contributors to the inflation stats, are all discretionary spending. Meanwhile food price inflation is lower, and fuel prices are actually falling.
Not great figures overall, but could be a lot worse. The worry now is that the inflation is showing itself to be sticky, which means interest rates up probably 50bps, and feeding into pay rises.
Food price inflation is about 15-20% and more in the real world of the economy shopping basket. Only so far one can go in cutting out ingredients in some pretty plain meals cooked up from the economy own brand ranges.
Sunak thought he was being clever making halving inflation one of his five priorities, even though it’s not something the government can control. In doing it, though, he took full ownership of the number and the cost of living. He’s not very good at politics.
Import price inflation is close to zero and producer price inflation is under 3%, yet CPI is still 8.7% - the UK economy is fundamentally broken. There's not enough competition in key areas and everyone is paying the price for 20 years of consolidation and the competition regulator allowing for oligopolies and monopolies to take root.
Everything else is much less important than fixing the uncompetitive domestic market.
Despite being an economist by training I don’t really understand inflation right now. To try to understand more, can I test some ideas that seem logical to me. Please (anyone) do challenge these if there is good evidence or theory against them: - Inflation in basics like food and fuel is fairly sticky - as prices rise people will often (have to) borrow to fund basics rather than reduce consumption. - Therefore putting up interest rates doesn’t have much effect on this sort of inflation, at least in the short term (hence today’s news not being that surprising). - The biggest impact of the BoE’s current course of rises is to bake in (with a delay of 6-18 months or so) a bunch of defaults on mortgages and business debt - At that point the economy is likely to crash, and we will be left with (a) permanently proportionately higher prices on basics like food and fuel and (b) permanently less money to afford these basics.
Seems like some poor choices are being made - but I can see they might be the least bad choices. Are there any alternatives?
Politically, it is looking less and less likely that Sunak will achieve his target of halving inflation this year. And there will be another high triple lock increase to approve while working families struggle.
Starmer probably needs to spend less time campaigning and more time hiring economic advisors to help him work out how to fix our economic mess once he's in power.
This serves Sunak right for trying to claim, what he expected would be an easy win, as his own endeavour when it is pretty much the remit of the inept BOE
Sunak thought he was being clever making halving inflation one of his five priorities, even though it’s not something the government can control. In doing it, though, he took full ownership of the number and the cost of living. He’s not very good at politics.
He’s been hopeless since day one with Eat Out to Spread Covid About. He is completely out of his depth.
Those inflation stats look weird. Most of the upward pressure is of less essential stuff, while food's down.
Why is inflation proving stickier here than elsewhere?
Food is not down Morris, it is rising at nearly twice the overall rate of inflation. The fact that this is a modest improvement over the last 3 months does not make it good. Food seems to me the one that is really hurting and going to hurt the poorer members of our society.
Import price inflation is close to zero and producer price inflation is under 3%, yet CPI is still 8.7% - the UK economy is fundamentally broken. There's not enough competition in key areas and everyone is paying the price for 20 years of consolidation and the competition regulator allowing for oligopolies and monopolies to take root.
Everything else is much less important than fixing the uncompetitive domestic market.
Despite being an economist by training I don’t really understand inflation right now. To try to understand more, can I test some ideas that seem logical to me. Please (anyone) do challenge these if there is good evidence or theory against them: - Inflation in basics like food and fuel is fairly sticky - as prices rise people will often (have to) borrow to fund basics rather than reduce consumption. - Therefore putting up interest rates doesn’t have much effect on this sort of inflation, at least in the short term (hence today’s news not being that surprising). - The biggest impact of the BoE’s current course of rises is to bake in (with a delay of 6-18 months or so) a bunch of defaults on mortgages and business debt - At that point the economy is likely to crash, and we will be left with (a) permanently proportionately higher prices on basics like food and fuel and (b) permanently less money to afford these basics.
Seems like some poor choices are being made - but I can see they might be the least bad choices. Are there any alternatives?
Profit driven inflation seems to be increasingly popular as an explanation, and not just on the left.
Inflation 8.7%. Core inflation is up to 7.1%, above expectations
Beginning to think these figures are meaningless. Everyone's inflation rate is different. It depends what you buy... or don't buy. And above whose expectations.....
Well I can only assume you are an extremely wealthy individual with no mortgage, tone deaf, or trolling?
Jeez. Seriously? I do my weekly shop and it's awful. And many of my closest relatives are in despair over their mortgage situation.*
And you think this is 'meaningless'?
* I don't have a mortgage because I don't *own a house. I rent.
On mortgages the problem is too many people over leveraged themselves.
Although Labour have a pretty uninspired front bench Reeves and McFadden do give the impression of being pretty competent even if they went to dip into pension pots to "boost Britain", I expect they would be measured.
The next election will come down to the economy, it won't be woke, it won't be the circus of the vote on Monday, it will be the economy and the fact our living standards have stagnated.
Inflation not coming down and pay rises being mediocre won't improve that.
Import price inflation is close to zero and producer price inflation is under 3%, yet CPI is still 8.7% - the UK economy is fundamentally broken. There's not enough competition in key areas and everyone is paying the price for 20 years of consolidation and the competition regulator allowing for oligopolies and monopolies to take root.
Everything else is much less important than fixing the uncompetitive domestic market.
See for a really obvious example - petrol station fuel prices.
Remember Asda used to lead the price cuts now it's owned by EG who have always been expensive.
Good morning
Talking of Asda their diesel dropped below petrol last week at £1.36 to £1.37 for petrol
With his stupid pledges he’s written the next Labour campaign for them, a man so utterly out of his depth he makes Johnson look vaguely competent.
What an absolute joke.
What an absurd statement. Rishi Sunak is not a terrible PM, and he does not make Boris look vaguely competent.
Hope you going Taz?
I stand by what I said. Weak Rishi is failing by every measure he asked us to judge him on. He is completely useless. Johnson was much better at politics.
Although Labour have a pretty uninspired front bench Reeves and McFadden do give the impression of being pretty competent even if they went to dip into pension pots to "boost Britain", I expect they would be measured.
The next election will come down to the economy, it won't be woke, it won't be the circus of the vote on Monday, it will be the economy and the fact our living standards have stagnated.
Inflation not coming down and pay rises being mediocre won't improve that.
Spot on.
Keir has played the long game into Downing Street. His team thought the economy would become the defining issue once again and they have been walking that line from day one. They’ve been lucky for all of the ducks to align but they’ve also played the game very well indeed.
BBC: As per the Office for National Statistics, here's some more detail on that headline inflation figure.
- Rising prices for air travel, recreational and cultural goods and services, and second-hand cars resulted in the largest upward contributions - Falling prices for motor fuel led to the largest downward contribution - Prices for food and non-alcoholic beverages rose in May 2023 but by less than in May 2022
So the four largest contributors to the inflation stats, are all discretionary spending. Meanwhile food price inflation is lower, and fuel prices are actually falling.
Not great figures overall, but could be a lot worse. The worry now is that the inflation is showing itself to be sticky, which means interest rates up probably 50bps, and feeding into pay rises.
The backdrop behind this vile individual is no great surprise. A BBC investigation has uncovered an international network of people paying Indonesians to torture & kill baby monkeys on film
“The Torture King", American Mike McCartney, was reportedly a key distributor of the videos in the US.
A key point: “People are thinking more and more about what they eat and how they cook as the cost of living crisis takes its toll on traditional behaviours.
“The most prominent change we’ve seen is that people are preparing simpler dishes with fewer ingredients.”
This may not be a bad thing - simpler food with less added crap would be good for our overall health. But its being done through desperation rather than positive choice.
Meanwhile in restaurants world, the same is being done. The amount of downgrading of ingredients on restaurant menus is mind-boggling. That the cheaper ingredient is being combined with a price rise for the diner just rubs salt in the wound...
People are not mugs. They will just stop dining out. Our local dining out facebook page used to be full of nice meals in local restaurants now its full of "Look at what I got for £15.00 !!!!" posts.
Recessions and economic downturns are great for dining and drinking at home. In 2008 I was working for a company that made machinery for food production. Our order book went from strength to strength as a consequence.
As for Food inflation being a Tory tax, food inflation is high all over but is coming down. It is a stretch to blame the Tories for that in its entirity. I have noticed some of my regular food purchases are starting to decrease in price too so I am more optimistic.
So having just quoted you actual industry data, you think that your personal experience is more correct / valid? It is of course correct that even in the middle of this inflation bomb the supermarkets are competing and trying to out-position on price. But the odd price cut is not prices falling - they are making the money back on the rest of the basket which is rising.
So in any given basket of items, a couple with the prices dropping and the rest with the prices rising means the overall cost to buy it is rising. A lot. If you only buy the two items that are mega price competitive and dropped, good for you. Doesn't mean you have any right to be optimistic about the items you are not buying though.
I assume part of the food inflation is supermarkets rebuilding margins - they have historically been miles below the US, for example.
Inflation 8.7%. Core inflation is up to 7.1%, above expectations
Beginning to think these figures are meaningless. Everyone's inflation rate is different. It depends what you buy... or don't buy. And above whose expectations.....
Unless you're arguing that official stats are useless and shouldn't be published, they're the best estimate available of the overall position. If you're talking about individual perception, there's a pretty broad consensus - regardless of political persuasion - that prices are going up rapidly. You can argue that it's not the Tories' fault, but arguing that it's all illusory is Bourbon-scale insouciance.
A key point: “People are thinking more and more about what they eat and how they cook as the cost of living crisis takes its toll on traditional behaviours.
“The most prominent change we’ve seen is that people are preparing simpler dishes with fewer ingredients.”
This may not be a bad thing - simpler food with less added crap would be good for our overall health. But its being done through desperation rather than positive choice.
Meanwhile in restaurants world, the same is being done. The amount of downgrading of ingredients on restaurant menus is mind-boggling. That the cheaper ingredient is being combined with a price rise for the diner just rubs salt in the wound...
People are not mugs. They will just stop dining out. Our local dining out facebook page used to be full of nice meals in local restaurants now its full of "Look at what I got for £15.00 !!!!" posts.
Recessions and economic downturns are great for dining and drinking at home. In 2008 I was working for a company that made machinery for food production. Our order book went from strength to strength as a consequence.
As for Food inflation being a Tory tax, food inflation is high all over but is coming down. It is a stretch to blame the Tories for that in its entirity. I have noticed some of my regular food purchases are starting to decrease in price too so I am more optimistic.
So having just quoted you actual industry data, you think that your personal experience is more correct / valid?
It is to my personal rate of inflation, of course it is to me. So no need to be so condescending (as if you wouldn't pass that opportunity up) and, yes, we are all aware of the difference between deflation and inflation.
I have said food inflation is coming down, it is.
I have not said it is deflation which you seem to think and yes I am optimistic that food inflation has peaked for a variety of reasons.
You are not the only one, as I have said before, whose work involved the food and beverage industry and, quite frankly, the fact you see food inflation as a "Tory Tax" hardly makes you the most rational of observers given food inflation is prevalent across the whole of Europe.
Viewcode the guy is not the full shilling , be like talking to a brick. Not even a moronic half witted neanderthal could believe such obvious bullshit.
A key point: “People are thinking more and more about what they eat and how they cook as the cost of living crisis takes its toll on traditional behaviours.
“The most prominent change we’ve seen is that people are preparing simpler dishes with fewer ingredients.”
This may not be a bad thing - simpler food with less added crap would be good for our overall health. But its being done through desperation rather than positive choice.
Meanwhile in restaurants world, the same is being done. The amount of downgrading of ingredients on restaurant menus is mind-boggling. That the cheaper ingredient is being combined with a price rise for the diner just rubs salt in the wound...
People are not mugs. They will just stop dining out. Our local dining out facebook page used to be full of nice meals in local restaurants now its full of "Look at what I got for £15.00 !!!!" posts.
Recessions and economic downturns are great for dining and drinking at home. In 2008 I was working for a company that made machinery for food production. Our order book went from strength to strength as a consequence.
As for Food inflation being a Tory tax, food inflation is high all over but is coming down. It is a stretch to blame the Tories for that in its entirity. I have noticed some of my regular food purchases are starting to decrease in price too so I am more optimistic.
So having just quoted you actual industry data, you think that your personal experience is more correct / valid? It is of course correct that even in the middle of this inflation bomb the supermarkets are competing and trying to out-position on price. But the odd price cut is not prices falling - they are making the money back on the rest of the basket which is rising.
So in any given basket of items, a couple with the prices dropping and the rest with the prices rising means the overall cost to buy it is rising. A lot. If you only buy the two items that are mega price competitive and dropped, good for you. Doesn't mean you have any right to be optimistic about the items you are not buying though.
I assume part of the food inflation is supermarkets rebuilding margins - they have historically been miles below the US, for example.
But perhaps you have a better view?
Look at Tesco's number this year and last year. They are struggling to maintain margins.
Comments
Not great figures overall, but could be a lot worse. The worry now is that the inflation is showing itself to be sticky, which means interest rates up probably 50bps, and feeding into pay rises.
Starmer probably needs to spend less time campaigning and more time hiring economic advisors to help him work out how to fix our economic mess once he's in power.
With his stupid pledges he’s written the next Labour campaign for them, a man so utterly out of his depth he makes Johnson look vaguely competent.
What an absolute joke.
https://www.which.co.uk/news/article/cost-of-cooking-a-family-meal-soars-by-up-to-27-as-price-of-some-ingredients-doubles-aA3K74w0eh7b
- Inflation in basics like food and fuel is fairly sticky - as prices rise people will often (have to) borrow to fund basics rather than reduce consumption.
- Therefore putting up interest rates doesn’t have much effect on this sort of inflation, at least in the short term (hence today’s news not being that surprising).
- The biggest impact of the BoE’s current course of rises is to bake in (with a delay of 6-18 months or so) a bunch of defaults on mortgages and business debt
- At that point the economy is likely to crash, and we will be left with (a) permanently proportionately higher prices on basics like food and fuel and (b) permanently less money to afford these basics.
Seems like some poor choices are being made - but I can see they might be the least bad choices. Are there any alternatives?
The next election will come down to the economy, it won't be woke, it won't be the circus of the vote on Monday, it will be the economy and the fact our living standards have stagnated.
Inflation not coming down and pay rises being mediocre won't improve that.
Talking of Asda their diesel dropped below petrol last week at £1.36 to £1.37 for petrol
I stand by what I said. Weak Rishi is failing by every measure he asked us to judge him on. He is completely useless. Johnson was much better at politics.
US and UK wage prices, world food prices, European energy prices...just add Brexit
Not that it has anything much to do with him anyway.
Keir has played the long game into Downing Street. His team thought the economy would become the defining issue once again and they have been walking that line from day one. They’ve been lucky for all of the ducks to align but they’ve also played the game very well indeed.
But perhaps you have a better view?
I have said food inflation is coming down, it is.
I have not said it is deflation which you seem to think and yes I am optimistic that food inflation has peaked for a variety of reasons.
You are not the only one, as I have said before, whose work involved the food and beverage industry and, quite frankly, the fact you see food inflation as a "Tory Tax" hardly makes you the most rational of observers given food inflation is prevalent across the whole of Europe.
Viewcode the guy is not the full shilling , be like talking to a brick. Not even a moronic half witted neanderthal could believe such obvious bullshit.