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

It seems these days we're ambivalent toward the production of stuff, or even antagonistic to it in many cases. So we have less stuff. Combine this with giving people more money and you get inflation.

Making billionaires more wealthy doesn't affect inflation much because they are already consuming as much as they want. That money will just increase the price of stocks and bonds - whatever billionaires invest in.

Giving every average Joe a thousand more dollars will increase spending by nearly that amount per person and prices of goods will increase.

Giving money to people who need money is part of the solution, but the biggest part of the solution is making sure human productivity (GDP) is going to make things that make people's lives better.

People on modest salaries either don't spot the cheaper, just-as-good toothpaste that's not as prominent, they think that it's not as good as the ones with lists of all the great things they're supposed to do, or they aren't feeling the squeeze enough to seek it out.

If you drop into an independent chemist you might notice that sometimes the only toothpaste they stock is the 'basic' one, because their customers are price-sensitive, so that's all they'll buy.

Going rate for pizza is around 60p/100g, with a larger than average Aldi 'Meat Feast' pizza coming in at £2.19, which is 39p/100g.

Again, if you're on a 'modest salary', you pick the cheaper products or pick the supermarkets which only really sell the cheaper products.

I'm not saying that prices aren't going up, just that closer to the 'survival' line, there is much less room to increase prices, because people aren't at the point of choosing based on preference, so you can't rely on them switching to a slightly cheaper option from your artificially differentiated product line (yes, you, Colgate-Palmolive). They'll just be forced to stop buying your products altogether.

I took up cooking from scratch as a hobby a couple of decades ago. I highly recommend it.

After a bit of a learning curve, it's cheaper, tastier. and better for you than highly processed foodlike substances.

The only reason some companies are able to get away with this is because too many people shop mindlessly without checking prices.

The solution is for everyone to pay attention to prices when we shop: the brands who jump their prices up will have 0 customers.

I'm not saying it's easy, and perhaps grocery store price labelling isn't maximally effective, but when we shop frugally, we actually benefit not only ourselves, but each other.

Like you pay £1.5 for essential product if you scan a card otherwise it is £3.

These should be made illegal.

oBViOUSLy tHE rUSsIANs dID it ;p

https://tradingeconomics.com/country-list/food-inflation (Click on World Tab, and click on the inflation heading to sort - I needed to tap and slide to get it to sort descending).

Not sure why but generally journos seem to write about issues like they are only hitting the UK when a simple google search shows they aren’t.

It does come across like a weird concerted effort to paint the UK as collapsing since leaving the EU. The majority of journos seem to be able to write only negatively about UK current affairs unless you read something like The Express who are delusional in their own right.

Most recent ones I can think of are the failed space launch and British volt going under.

These were both highly ambitious projects that had a high chance of failure, especially the space launch. It’s unlikely you’re going to get your first launch right, famously it takes many attempts.

When both of these happened journalists seemed to revel in the failure. It was very odd to see.

I understand with these two examples a lot of it has to do with government/brexiteer chest thumping which shon a spotlight on them. However it was still odd to see.

I think this then trickles down to places like HN (who’s membership generally has a bias towards remain) who also see an opportunity to revel in it.

This is odd as well because I can see why Britons or Europeans would be passionate about membership in a regional trade bloc, Americans who get really passionate about it confuse me. As a Briton I didn’t really care when America left NAFTA.

This is assuming the majority of people on HN are American but based on time zones and when articles are posted I’m probably wrong.

Edit:

This is a UK based publication writing about Groceries in the UK which is why it’s so specific. Your comment just spurred something I’ve been thinking recently.

To answer your question: "Not sure why the UK is being singled out."

The answer to me is simply that it is a UK website www.grocerygazette.co.uk

There are plenty of similar stories about the same kind of inflation here in [redacted] such as [redacted].

With Hacker News being predominately English speaking I suspect plays into why we see more US and UK (and other English speaking countries) related posts vs non-English speaking.

And of course people do love to point out where the UK is suffering these days to put a Brexit spin on it (whether fair or not) as it gets them clicks. Much like a famous or young person dying is almost always reported as "died suddenly" these days regardless of nature of death as it gets clicks with all the anti-vax crowd.

Can't be that one has tech or purchasing power that the other doesn't, or that food needs to travel a lot further, and I would also not expect vastly different foreign relations (also because EU, but also because the countries are so similar in beliefs and histories).

And similar for slightly different but still nearby and similar countries like Germany, Luxemburg, and the UK. Anyone know what causes these differences?

Edit: to answer your question, I wouldn't look for meaning behind that but rather assume that a limited scope article is a lot easier to write than a broadly scoped one. In the ~global context of HN, the headline then sounds like they're singled out.

Source: live in UK

The UK is being singled out because its not able to import the groceries it used to do before Brexit now - there has been a low yield crop season in most parts of Europe and the domestic demand for groceries has literally exhausted the supply that can be exported. Since the UK is out of the Eu, its not possible to access the Eu domestic supply anymore and it has to wait for what remains for export.

https://www.cnbc.com/2023/02/28/british-supermarkets-are-rat...

There isnt such a situation like rationing vegetables anywhere else in Europe.

They can choose between the individual products they buy, so it wouldn't be a problem if just some food items got expensive. But the price of food overall is inflating.

Here we're discussing food... People have to eat so demand for food, at least staples, does not change much when prices rise as long as people can afford to pay (and by and large currently they can).

It should also be noted that in developed countries the price of food has collapsed as a proportion of people's income over the last 100 years. So the reality is that even if prices double demand will probably not change much apart from some arbitrages (go to cheaper brands/supermarkets, drop in demand of a few luxury items and non food items).

In the UK where big business dominate, the competition is illusory and regulators turn the blind eye.

I wish so badly that he was wrong about these things, but every day it looks a little more like he got an absolute home run on this topic.

The only other advice I would give to people is, if there is something you need to buy now and you can - do it! Key word here is 'need'. I have been buying in bulk for years now and switching over to equipment that will last a long time. It doesn't mean you will be 100% fine but you can ride the dips as they come.

Political power can address inflation, and it can mitigate the effects of inflation on the less well off. These are, however, often opposed goals.

E.g., massive taxes on the working class with no added spending would kill demand-driven inflation, but also make the non-rich worse off.

OTOH, downward redistribution by spending (possibly coupled with high end taxes) would mitigate the low-end effects of inflation, but increase the magnitude of conaumer price inflation.

> In 1971 Nixon froze prices and wages by executive orde

Price controls create black markets, but usually do not control effective prices.

Plants don't really give a shit. Implementing a convoluted tech solution in greenhouses for an additional 5% efficiency will never pay back for itself.

> (My bias: I work for a startup that is working on this and I'm kind of obsessed with the industry.)

I suggest you actually learn more about growing plants than optimizing 20 different atmospheric and HVAC parameters. Many of these recent startups folded because they couldn't figure out that growing lettuce indoors hydroponically doesn't actually make anyone any money.

0. https://tradingeconomics.com/germany/food-inflation#:~:text=....

1. https://www.google.com/amp/s/amp.dw.com/en/germany-inflation...

Energy costs are the primary driving factors for the cost of nearly all aspects of modern life.

Anecdotally, seems there's a lot of British and European expats here in the Valley and they don't seem too keen on returning. We've been getting a lot of international applicants (but work from home was supposed to mean Europeans could avoid moving to the "dangerous" US but work for American companies?).

I understand it's probably a mix of both, but it's hard to tell the relative proportion as a consumer.

Scroll to page 9 for a good graph on how this works. Unit profits are massively up, unit labour costs stagnant.

As someone who occasionally orders stuff from UK businesses, I wish the pound would collapse against the Canadian dollar. Like, 1:1 or 1:1.2

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, where it does look like there may be some gouging going on, but we'd need to see their profit reporting to be sure:

https://accountable.us/wp-content/uploads/2023/02/2023-02-10...

Couscous and margarine and eggs being more expensive across the board at the supplier level. This does not speak to any sort of cartel behavior.

There are currently competing narratives in the UK about food prices - greedy supermarkets v poor farmers and the same people complaining then say they shop at Aldi because it's cheaper.

Food is still cheap - it represents a small percentage of people's income. However, in the UK, we are beginning to see that food produced without the benefit of slave labour is somewhat less cheaper than it used to be.

The main change has been energy prices (it is complex because supermarkets stopped selling some products, so the price recorded is not what consumers experienced because the product largely wasn't available).

Also, just generally, that isn't how demand for food works either. It isn't elastic, there are substitutes for every product. The main factor driving differences between countries is usually the structure of the food supply chain and exposure to trade.

I doubt it. I've read that Americans throw away 40% of their food. Obesity rates suggest people eat far more than they need to. And there are major choices in what to eat - cheap vs expensive calories.

In fact, local eggs are now cheaper than factory farm eggs around here, and chicken is getting to be equivalent in price to beef.

Even drug dealers aren't that greedy

Why did companies wait until this year to do that?

Food here is, empirically, still unbelievably cheap. I can buy a 500g bag of spaghetti for 28p, lentil and beans are cheap, bread is relatively cheap, chicken is so cheap that you wonder how safe it is...still...but the problem is that in the UK, if anything doesn't benefit you immediately then people will complain.

RM...they had a monopoly, their workers are almost always threatening industrial action, like they aren't "hanging by a thread"...they have a licence to print money, workers just won't turn up to work because they feel aggrieved.

NHS...funding is through the roof, the biggest individual component of the budget with a deficit of 5% and tax % of GDP at all-time highs...workers on strike, "they get paid more in Australia" (true of almost every job in the UK because Australia also has significantly higher CoL).

Crime? Again, we have an underclass of people who commit all the crime, repeat offenders often walk free over and over, shoplifting isn't investigated, robberies aren't investigated...and people wonder why it is attractive to commit crime?

Poverty hasn't increased, unemployment has dropped like a stone over the past ten years, all this time we have people like you: the economy is in FREE FALL, poverty is going to rise soon...it hasn't happened, the issue we have is that people are constantly feeling aggrieved. This seems to be a disease of the West too, you see the same thing in the US where there are real economic issues but there is very little discussion of them...all it is just single-dimensional, "things have never been so bad" grievance-building.

But no, nothing has really changed. Life carries on unsurprisingly. The UK has issues, food prices aren't one (in fact, food prices are far too low still), problems that do exist remain unaddressed, problems that don't exist absorb all of the attention.

* Energy prices are higher, and this has had a knock-on effect, but I see it more on childcare (e.g. nursery) than food.

* There have been shortages of some foods - specifically there were shortages of tomatoes and peppers for a week or two a month or two ago, but not recently... and there are shortages of eggs, which I understand from my cousins, who are egg farmers, is primarily due to bird flu (most eggs in the UK are from British hens).

* Regarding NHS, we've not needed to use hospitals recently, but access to GPs has been same as usual.

* I've not seen an increase in crime.

* I hear that poverty is rising, but don't have direct experience.

* The Royal Mail is almost certainly dying, but I think it's been on its way out for years.

Like I say, this is just personal experience - I appreciate that I'm quite lucky at having an OK-paying job, so could well be insulated from problems that others face.

Anecdotally at least:

- Brexit is a pretty notable economic negative, purely in the sense that it's added a lot of drag to EU trade and made it harder for workers to access the UK market. Nobody likes loads of red tape. It's hard to separate this from the many other influences from COVID through to Ukraine.

- There has been a pretty clear spike in the cost of living, which has a direct impact on things like poverty. Notably the housing market was very disrupted by the policies of the previous prime minister; again, it's hard to separate this from anything else but anecdotally a very large number of people noticed that they suddenly had to find hundreds of pounds of extra money every month due to housing end energy costs.

- The NHS is not in a great state, no. Several years of underinvestment and the pandemic came home to roost, and combined with the pandemic and rather a lot burnout it is not sounding great from anyone who works there.

- The economy isn't in "free fall" but does have several things dragging at it – including supply-chain difficulties, inflation, worker shortages, and other challenges. It's hard out there.

- Most noticeable and in-your-face thing for someone like me—in the fortunate position of being on the breadline—is an obvious deterioration in services and availability. Lots of strikes in various industries, quality of everything suffering, difficulties getting basic goods sometimes. It can feel pretty oppressive, though of course nothing compared to how some people must be struggling to get by at all.

32, tech worker, just bought a house in a village in the south... Yes my vegetables are a bit more expensive week to week, maybe i need to go to another store to buy one or two specific things but generally life is fine.

Still getting pay rises, still getting bonuses. Generally life is more comfortable for me than its ever been.

Someone set fire to a bin last week, does that count as an increase in crime?

Food bank use is clearly rising.

Royal Mail international shipping was down for at least a week due to ransomware: https://techcrunch.com/2023/02/23/royal-mail-restores-global... ; they are in general badly managed, but few delivery companies are ever loved.

Crime is not necessarily exploding, but confidence in the police is rather low. A Metropolitan police officer was jailed for 71 counts of sexual assault earlier this year, having done quite a lot to raise the crime rate all by himself.

We are not yet back to early 80s tent cities.

So things are getting noticeably worse but I wouldn't use words like collapse just yet.

Has only gotten worse, it seems.

Week ending 2023-01-18: 748,000 birds affected in Ontario, 7,051,000 in Canada [1]

Week ending 2023-03-22: 749,000 birds affected in Ontario, 7,173,000 in Canada [2]

[1] https://web.archive.org/web/20230120170319/https://inspectio...

[2] https://inspection.canada.ca/animal-health/terrestrial-anima...

Sunak will gracefully lose the next election, by a lot, but a lot less than Truss or BJ would have lost it by, and having helped to slow the freefall in reputation by the Tories and steadied the economy a bit. Keir Starmer will be a decent and competent but dull leader for two terms, and the who the heck knows. But the next ten years or so should be pretty dull, in a good, centrist sort of way, ideally culminating in rejoining the EU.

I'm hoping for boringly competent management of the economy plus a gradual drift back towards relatively friction free trade (both goods and services) with our largest neighbour.

Wage growth would be good and some action on housing so wage gains don't just turn into house price rises.

Not optimistic for the next ten years or so.

At the same time, a lot of these basics are getting more difficult in the name of efficiency: think about repairing a linen shirt with a loose weave and no stretch vs repairing a spandex-poly shirt with a very tight weave and a ton of stretch.

It's not hard not being obese, just eat less. Yes, that means having a degree of control over your actions, taking responsibility and not stuffing yourself with dopamine inducing fried food all day

[0] $4 for a bacon & egg biscuit, $1 more for buy-1-get-1-free, and the McCafe drink of any size comes free for an order of $3+

Companies LOVE an excuse to raise prices to where they "think" they should be, and inflation is a great time to do such.

The solution to allowing lower classes to have more stuff is to make it easier for everybody to produce more stuff.

Giving money CAN help with distribution of stuff, allowing poor people to purchase a larger share. But it requires lots of money given directly to the people that need it (vs allowing the gov't to spend it themselves). And also requires lots of high inflation. Imagine, for example, just giving everyone £10M to spend on whatever they want. This would not create any more stuff - but it would sure be a big equalizer for people buying that stuff!

But really - if we could all focus a bit more on production - allowing, encouraging, and celebrating it - then we'd all have a lot more stuff.

https://www.grocerygazette.co.uk/2023/01/31/food-companies-p...

Honestly you're right that inflation can benefit the well off, but I don't buy the conspiracy theory angle. "The Establishment" has been holding inflation rates at historically unprecedented lows for the last generation. It's been the number 1 priority for central banks since the early 90s. The last time the UK inflation rate was above 4% was over 20 years ago.

https://www.macrotrends.net/countries/GBR/united-kingdom/inf...

Other than the sticker shock on the price of everything, it's not too bad for a lot of us.

In fact, inflation is, in its current form, a tax levied by the government on all citizens--rich and poor. You are correct that the rich can find ways to hedge some of the effects of inflation, but that's expected as the rich have way more disposable income.

I just want to know for how long people will close their eyes to these policies (green energy stimulus, self-inflicted supply chain bottlenecks, QE and bailouts to ultra rich and party donors via deposit bailout).

What on earth are you eating? From where? The average 800g loaf costs £1.36.

But to feed into your point about who suffers, if you had to give up your luxury loaf, you could still afford two average loaves in its place. People who could only afford a 80p loaf before are now going without.

Actually, it's the opposite that is happening, because central banks have aggressively raised interest rates to bring inflation under control.

When rates rise, the net present value of every long-term cash-earning asset declines, and those individuals and businesses (including banks) that borrowed too much in relation to the declining value of their assets, can and will suffer large losses.

It's not a coincidence that stock markets are down, businesses are cutting costs, office buildings everywhere are starting to file for bankruptcy protection, mismanaged banks are now in financial distress, venture capital firms and their investors are facing the prospect of large losses, and so on.

I think it is very important to note that when it comes to grocery price increases, even if suppliers are raising their prices (and this isn't always the case), groceries stores aren't just passing down wholesale price increases, they're raising prices even further.

For grocery stores, this isn't an issue with (unqualified) "inflation", it's an issue of price gouging.

https://www.dailymail.co.uk/news/article-11668863/Supermarke...

For instance our PM Rishi Sunak has paid 24% tax on his £1.9m income last year, while the tax man takes 39% from my wage.

This should be fixed, but Sunak who was pushing for higher taxes on the workers, would never do that.

This is absolute scandal the rich can avoid paying their fair share this way.

Fact is the inflation we are seeing here is caused by the after effects of Covid, the Energy price surges caused by the Ukraine war and in the special case of UK - Brexit, which has lead to huge import shortages due to increased bureaucracy at the border, etc…

So please stop this conspiracy talk about the “rich” creating inflation to disown the “poor”.

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.

e.g. the ability to accumulate "Tokens of Power" (vs the equivalent of arcade game tokens for commodities) is what motivates the Steve Jobs and Elon Musks to do their universe denting.

This is quite different than say tribal societies where extra resources do not maintain their value across time. An abundance of meat and other resources can only be transmuted into common cultural power via Feasts and Festivals.

Metaphorically, "gold" creates "dragons" because it allows immortal hoarding. Dragons are the only thing with influenceable agency that can reshape "nature". Controlling dragons allows this dominance (for better or for worse) at the cost of dragon externalities (burned towns, randomly devoured livestock)

I’m sure the Roman plebeians also thought as much during drought induced famine; “the wealthy caused shortages by their greed”

Seems to be the natural response of the hyper-social-aware-confabulatory-ape-mind we, as humans possess.

But make no mistake, inflation is caused by a mismatch between societies expectation of productive capacity, and its real productive capacity.

Right now, real asset values are going down. Yes, some businesses have maintained nominal increases, but as consumers feel the squeeze so will asset real values. Asset valuation is based on real returns, and consumer behavior drives real returns.

When inflation is entrenched, wages and prices rise at a similar rate so that workers aren't too terribly effected but the value of financial assets don't keep up.

Inflation is insidious in that respect in that it compounds like interest, you might think 5% a year is not that much, but over 50 years the value of your assets are less than 10% than what they were.

It is harmful to the financial services industry in that people decide it is not worth investing. In 1979 Merrill Lynch was practically a penny stock because they didn't have any products to sell that people found attractive.

Ummm... nothing like the 70s/80s (I'm old).

Seriously I think that the younger people in the UK are showing immense stoicism and forbearance.

On the other hand, rising interest rates causes all assets to decline in value, and the decline is worse depending on how far away the "maturity date" is. It looks like the UK has been raising rates, similar to the US. [1]

[1] https://www.bankofengland.co.uk/boeapps/database/Bank-Rate.a...

Agree. But, even better in inflationary economy: Debt. You want to own massive assets with loads of debt.

I believe that Andrew Bailey, the current Governor of the Bank of England, was criticised for exactly that last year.

https://www.theguardian.com/business/2022/feb/04/bank-of-eng...

Inflation only negatively affects the poor in that their wages are sticky and do not adjust in time (so in effect, their wages in goods and services terms declines)

The same thing happens to rich people, it’s actually a “capital owner vs salary man” divide. (A small building owner is impacted less than a very wealthy athlete for example, since one can raise rent yearly and the other is in a long term salary contract).

I think fewer folks are willing to talk about what lockdowns did to the supply chain.

When you point your finger, there's three point back at you

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

What happens with those classes during deflation?

Cmon..I'm a brit too. I haven't seen riots. It's dangerous comment from you.

Uh, that's not true in the slightest?

Are you completely unaware of what's happened in the stock market and real estate market over the past year (these are the examples you provided lol)?

Neither "the rich" nor the "lower class" is a monolithic entity. The idea that they are monolithic allows for elites to disguise their selfish consolidation of power as evidence of being on the side of the people. For some obvious examples, Hitler successfully blamed the Jews for German hyperinflation, and Stalin successfully purged political enemies he deemed as "capitalist".

You mean dark, sinister side of capitalism, right?

This is a tautology. The lower class is defined that way. If they didn't suffer the most, they wouldn't be lower class.

https://migrationobservatory.ox.ac.uk/resources/briefings/lo...

I think you have it backward. I think the inflation is the byproduct of their ability to own and hoard assets like land and labor, and reap the most value from those things, while everyone else is unable to get a foothold.

Inflation is happening because everyone is making more money, and everyone got a bunch of during covid, and now a lot of people are having large swaths of debt cut from their lives (college loan forgiveness program), not because rich people own stuff. But poorer people also can’t get ahead because rich people own everything.

This is a capitalism problem more specifically than it is a rich v. poor problem. Make it illegal to own more than one property and you will instantly give the lower and middle classes a chance.

Sometimes it feels like the site is being astroturfed with progressive / class warfare type messages.

Othertimes I feel it's just the same old "eternal september" problem but with techies, a bunch of young idealistic kids fresh out of college who tend to think in black and white terms of "us" vs "them". I remember being this way as a teenager, not quite sure when I grew out of it.

I remember listening to punk rock and advocating for "anarchy" etc (I'm sure I got the idea listening to too much Sex Pistols)... SMH... We all took ourselves and our political views sooooo seriously at that age.... Thank god no one was listening to me back then. The difference between then and now is that my conversations were in person and shared amongst a few high school kids, now they're broadcast to the world, commented on, and amplified.

The more I think about it, I'm hoping its just kids being kids.

It is a horrendously boring argument which immigrants like me "cannot understand" because somehow or other we don't feel like we belong on either "side".

(Practically, Aldi/Lidl are where one goes for cheap UK groceries, or Farmfoods if you want frozen/nonperishables)

It's not like they wouldn't like to export when they could. But they are not allowed to export due to various sanctions and limitations. It's almost like one side taking half of the world as hostages and letting them hunger, so they could harm and blame the other side.

But yes, "Carthago delenda est" no matter the costs and victims.

> This is unjustified. Under no circumstances could this happen unless a) price gauging, or b) supply chain is drying up.

Are you aware that both Russia and Ukraine are (normally) major exporters of grain?

Electricity prices have sky rocketed in most of Europe.

No.

> This crypto coin can be distributed to everyone every month/week and with a expiry date.

So, you are reinventing ration cards, but with a lot of extra complication?

It... doesn't solve, or even address, inflation. It does create a black/gray market, though, with the usual attendant crime around such markets.