Shop Price 'Inflation' RISES

WTF?_2 · 4 February 2009 at 12:15PM

So much for the 'death spiral of falling prices' that the media have been hawking to justify interest rate cuts:

http://www.retail-week.com/News/2009/02/shop_price_inflation_rises_in_january.html

UK shop price inflation rose 1.1 per cent in January according to the BRC Nielsen Shop Price Index.

This was up from 0.5 per cent in December.

Food inflation also up in January, rising to 7.5 per cent compared to 6.2 per cent in December.

Since summer the report has shown a trend for decelerating inflation however unprecedented promotional activity by retailers in December has temporarily reversed this trend.

Non-food prices showed deflation in January, down 2.1 per cent compared with the same time last year.

BRC director general Stephen Robertson said: "Retailers' margins are taking a hammering as they hold down prices to encourage hard-up customers. Most non-food goods continue to be significantly cheaper than a year ago. And prices in sectors including clothing and furniture are actually falling more quickly."

He added: "But the effects of the weak pound are starting to filter through to the costs of imports, slowing the rate of price falls for some non-food goods and contributing to pushing up the prices of some food products. In particular the fall in sterling has increased overseas demand for UK beef and pushed up the price of some imported commodities."

So, the period of price falls may well be over as the collapsed pound causes imports to be more expensive - and those increased costs will be feeding through to the consumer in the coming months.

Stagflation here we come.

Really2 · 4 February 2009 at 12:21PM

I agree the prices have increased due to exchange rates.
But I think you will see in the next 6 months.

£= $1.5-£1.6
£= 1.2-1.3 Euros

Prices will fall again it is just that there had been a mass £ sell off which looks to be recovering in the last two weeks or so.

I expect prices to start to fall again in the next month or two (and we import all our goods)

ad44downey · 4 February 2009 at 12:32PM

I agree. This deflation nonsense is a myth. I see train fares went up over 6% just last month. They're very selective in what they choose to measure inflation. They're kidding no-one.

amcluesent · 4 February 2009 at 12:48PM

The Bank is printing money too. ££ Billions!

Massive inflation coming Q4 2009, esp. as other economies come out of recession before us and oil/gas prices go back up.

WTF?_2 · 4 February 2009 at 1:04PM

Really2 wrote: »

I agree the prices have increased due to exchange rates.
But I think you will see in the next 6 months.

£= $1.5-£1.6
£= 1.2-1.3 Euros

Prices will fall again it is just that there had been a mass £ sell off which looks to be recovering in the last two weeks or so.

I expect prices to start to fall again in the next month or two (and we import all our goods)

I would certainly expect a recovery against the Euro, or rather a Euro collapse, at some stage. The Dollar should fall too but market psychology and unique conditions (global reserve, petro currency) gives it a massive advantage vs any other currency.

However, I don't expect the benefits of any relative strengthening of Sterling to filter through for quite a few months after it happens. We are already just beginning to see the effects of the recent collapse of Sterling manifest themselves.

ruggedtoast · 4 February 2009 at 1:06PM

I agree its very odd how the government keeps announcing policies to achieve one thing, and then the exact opposite happens.

If I didnt know better I would say its almost like they didnt know what they were doing.

purch · 4 February 2009 at 1:16PM

Stagflation here we come.

Can't wait :T

The Bank is printing money too. ££ Billions!

Massive inflation coming Q4 2009,

Do you think that if you keep repeating it, it might actually come true ??

Or are you just trying to convince yourself ?????

chucky · 4 February 2009 at 1:31PM

!!!!!!? wrote: »

I would certainly expect a recovery against the Euro, or rather a Euro collapse, at some stage. The Dollar should fall too but market psychology and unique conditions (global reserve, petro currency) gives it a massive advantage vs any other currency.

However, I don't expect the benefits of any relative strengthening of Sterling to filter through for quite a few months after it happens. We are already just beginning to see the effects of the recent collapse of Sterling manifest themselves.

when it does happen and prices do drop again due to the exchange rates going the other way - can you post a link letting us know?

also, would you know which economy do you think is perfect and doesn't have any issues?

Cannon_Fodder · 4 February 2009 at 1:33PM

Well, actually, it is factual - they ARE printing and issuing money in Billions...

Issue of Bank of England banknotes by value
(£ Millions)

£5 £10 £20 £50 Total
2003/04 1,545 3,367 4,589 525 10,027
2004/05 534 2,978 6,363 608 10,482
2005/06 314 2,287 6,825 331 9,757
2006/07 532 3,233 6,551 658 10,973
2007/08 812 3,298 14,416 921 19,447

Might not qualify as QE, but something has happened this year - nearly double the issue of last year - and stocks of notes are dwindling, too...

http://www.bankofengland.co.uk/banknotes/about/stats.htm

kennyboy66_2 · 4 February 2009 at 1:46PM

July index was 3.2%
Aug index was 3.8%
.....
Dec index was 0.5%
Jan index was 1.1%

Food index in July 9.5%
Food index in August 10%
...............
Food Dec 7.5%
Food Jan 6.2%

Hardly stunning proof that we are about to enter stagflation is it ?

"unprecedented promotional activity by retailers in December has temporarily reversed this trend."

Perhaps that was a clue.

Zagu · 4 February 2009 at 2:01PM

purch wrote: »

Can't wait :T

Why?

...........

Debate House Prices

Shop Price 'Inflation' RISES

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