The data shows that food inflation is falling to levels last seen before the Ukraine war. This is also true of raw material prices. In other words, the shocks that caused an unnecessary market reaction that hiked international prices, largely as a result of the onset of that war but also in reaction to the reopening after COVID-19, have now all gone away or will cease to have much impact very soon.
This is, of course, exactly as a few of us predicted and which was denied as being a possibility by the likes of the Bank of England.
Did their increasing interest rates have any effect on this? No, not at all, although Brexit did have an impact in leaving our inflation higher than anyone else’s.
Did anyone else’s interest rate rises affect this? Again, no, because the lag effect on any impact from such changes is usually reckoned to be two years, and the downturn came long before they could have had an impact.
We can measure inflation in two ways. General – ie, all prices, weighted across the consumer basket – or core. We observe that certain prices are highly variable, both up and down. Food and fuel, largely enough. Sure, such prices changing change the consumer lifestyle, most assuredly they do. But they can also be a misleading guide to inflationary pressures in the economy. For they’re highly variable for reasons nothing to do with interest rates, money supply, magic money tree printing and all the rest.
So, we do measure inflation in both those ways, everything and also core – without those highly variable food and fuel. And it’s that second one, core, which is used as the policy guide because that’s the one containing more information about interest rates, money supply and magic money tree printing.
Which does mean that posturing about food prices and interest rates is the activity of a fool, an ignorant or, possibly, a propagandist deliberately attempting to mislead.
“a propagandist deliberately attempting to mislead.”
Increasingly obvious that this is what he is. A second rate one at that. He’ll allow the occasional dissenting voice on his blog if he thinks he’s got a ‘smart’ put down, but anything that truly puts his arguments to the sword is never published (although occasionally, he’s so stupid he doesn’t realise what a tit he is making himself look by his responses)
It doesn’t really help which category Murphy falls into, a bit of all three IMV, plus of course he’s a colossal suppurating b3llend.
However, someone who posts here has met Murphy I think and took the impression Murphy gives off the vibe that he thinks he’s the smartest guy in the room.
I had the “pleasure” of meeting the great man. I believe that Van Patten has more experience in basking in the light emanating from Ely.
He certainly gave the impression that he was the smartest man in the room( allied to a smug fake modesty). I also knew his twin jonathan when were both on the same 2 year course too many years ago. Paradoxically he seemed a nice bloke. I think the potato is an entirely self made man (and no thats not a compliment)
to clarify “he gave the impression that he thought he was the smartest man in the room”