What is the real level of food price inflation? Are the official numbers released by the Office of National Statistics (ONS) understated? Well the ONS is under attack from both sides. On one front there’s J Sainsbury’s CEO, Justin King, who yesterday claimed that the official food inflation annual number of 6.6% is way too high. Real food inflation, he said, is just 2%. The discrepancy comes be…Read the article
Inflation is public enemy number one for us because it picks our pockets by eroding the real value of our bonds. The latest twist to the inflationary story is the rapid rise in food prices, from the staples of wheat to rice (click chart to enlarge).
Normally central banks can dismiss volatile food prices as temporary, because prices are influenced by random effects such as drought and weather …Read the article
With food inflation hitting record highs, and oil at over $115 per barrel, it’s difficult to see that policy makers might be more worried about deflation than inflation. In fact a bit more inflation in the global economy might be secretly felt to be a good thing – anything that erodes the consumer’s debt burden could help economic growth get back towards trend. But as Jim pointed out (see artic…Read the article