UK ministers discuss voluntary price limits for basic foods | 'Economists would say this is bonkers'

#costofliving #ministers

'It doesn't really look like the Government is going to go ahead with this as a serious proposal... economists across the spectrum would regard this as frankly bonkers.'

Professor of Economics Jonathan Portes discusses ministers planning to voluntarily cap the price of basic food items in an effort to ease the UK's cost-of-living squeeze.

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[barneymagee]

How about cutting funding for foreign wars, and foreign aid.

[gigi]

First the government adds on all these taxes and restrictions for farmers, then they want them to operate at a lose? Bring common sense back; it seems to be in short supply everywhere these days

[amfearliathmor]

With food inflation typically around 50% in the last year in the UK, the Powers that be (World Economic Forum Government penetrations and corporate partners) will eventually introduce price controls, which will begin to limit food production (cannot make a profit with the input costs) and agriculture further shrinking the supply side and will lead to hyperinflationary pressure and a real shortage of food. Another way of adding to the ESG and NetZero (no industrial fertilizer production reducing agricultural yields and farmland production restrictions as in the Netherlands) induced UK Holodomor.

[johnfoster]

I run a food business. OUR inflation has been caused by a multitude of factors:

Increased gas and electricity costs by 350% We had to contract at a very high price else face shutting the factory. Those contracts will not ease for several months even as wholesale prices drop. Energy is 3% - 4% of the selling price of our product. 350% of 3% = 10.5% inflation on the food

Higher wage costs lead by the minimum wage increase. In our business wages are 43% of the selling price. Although our firm pays more than the minimum wage, it set a benchmark for all pay increases. 43% of 9.7% = 4.1% inflation on the food. Unless people want a pay cut this inflationary factor will be "sticky"

A number of our ingredients are made from commodities where Ukraine was a big world producer. This shortage has caused higher prices which will prevail (at least in part) until stability resumes. We have seen prices more than double on many ingredients so affected.

Packaging costs went up massively because Russia was a big supplier of wood to make cardboard.

Several farmers have reduced production because high fuel and fertilizer costs - Russia was a big supplier for both. Fewer farmers farming means higher prices and it takes a year to get the next crop on many commodities.

We use lots of eggs. Bird flu has decimated egg production in the UK resulting in much higher prices - this isn't cured overnight - so prices remain high.

Some of our competitors went bust due to covid lockdowns, adding to the shortage and pressurising prices upwards.

We have greater absenteeism among staff (so higher sick pay). I have never seen so many poorly colleagues a few who are now very poorly due to lack of early diagnosis in covid and some who can't get timely treatment because the NHS is in such a mess.

We are having no problem with our imports or exports with Europe. The extra paperwork for us is almost just a different box to tick on the computer.

The only place we've had trouble supplying is Northern Ireland and THAT IS brexit incompetence related.

[poundsound]

Government incompetence has nothing to do with it surely?

[maxilopez]

It will come eventually. We're a banana republic and can't stop printing money.

[gregmoore]

They tried price caps on bread just before the French Revolution!

[cheds]

This is how the French Revolution started. Let’s do it

[PedroRodrigues-xfmo]

Putting price cap will only rise the price and create shortage for food supply this is stupid

[pessi]

Food inflation G7 v BRICS

G7
🇺🇲 USA: 7.7%
🇨🇦 Canada: 8.3%
🇬🇧 Britain: 19.1%
🇩🇪 Germany: 16.8%
🇫🇷 France: 14.9%
🇮🇹 Italy: 12.1%
🇯🇵 Japan: 8.4%

BRICS
🇧🇷 Brazil: 5.88%
🇷🇺 Russia: 0.01%
🇮🇳 India: 3.84%
🇨🇳 China: 0.4%
🇿🇦 South Africa: 14%

Multipolar World anyone? 😂

[stevenwileman]

Why not? Many countries do this. Is the UK too arrogant to do this?

[timg]

So, inflation is 'stickier' than they hoped.

Have they stopped using quantitative easing, then ?

Inflation is caused by QE. The Ukrainian war is simply focusing that inflation on food and energy.

[deniseorozco]

FIRST to comment! 😅
Definitely need to continue prepping! 🇺🇸

[techtinkerin]

Lol voluntary now is it, what a p take

[CallmeKenneth-tbzb]

Can we accept that Brexit has been an unmitigated failure without saying leaving the EU was the wrong move? Brexit has failed because of the people in charge of making it a success have failed to do so. In fact stating that Brexit has been an unmitigated failure is a commendation of this government. They had one job and were handed an 83 seat majority to make sure it happened, and they still failed. Brexit _is_ a failure, but only because those in charge never believed in leaving the EU.

[alastairharris]

We don't have trade barriers with the EU (Europe is something different to the EU!). We have the Boris treaty to thank for that!

[BlueSteel]

I don't see any reason why food inflation should be at nearly 20% = looks like blatant profiteering and price gouging is going on here....they always rise prices in an instant but are extremely reluctant to reduce prices again.

[jack_timber]

According to Nigel Brexit is working fine and dandy, well in his world it Nigel should be more careful with the choice of his guests especially when they know more than him.

[razkhan]

Cost for living crisis and the high inflation rate is high? UK is higher than Europe countries

[Anurania]

European countries have many elements of socialism. They aren't pure capitalist societies. There's nothing controversial about introducing price caps on basic necessities. It would be subsidized and part of the transaction cost would be covered by the government in the same way a tax percentage is calculated when purchases are made.