Inflation at 4.4%

[Beardy10]

anonymous said:

[redacted]

Yes that's true but the price of things like oil and pretty much all commodities fell during that period of credit contraction which was nothing to do with interest rates being cut....it was purely demand led...or rather the lack of demand. But as you say there was inflation on other goods like food and obviously many imported goods have risen in price with the weakness in the pound.

[johnnywb]

It's not really a surprise given the cost of fuel!

Prices seem to be going up almost 1p a week at the moment. Two weeks ago i paid £1.27 for super. Yesterday i paid £1.30 at the same garage.

It's now costing me £78 to fill my tank up. 18 months ago that cost around £57. Everything we consume is moved by road, that's the big problem.

[Nick_F]

BOE base rates will have no measurable effect on the cost of globally traded commodities: if those are driving inflation, then local interest rates are not the way to put the brakes on it.

[briSk]

Nick_F said:

BOE base rates will have no measurable effect on the cost of globally traded commodities: if those are driving inflation, then local interest rates are not the way to put the brakes on it.

i am forever saying this but no one ever listens (as ever!)

..so the key thing is to sort out sterling...
oh but weak sterling is what's proping us up.

oh feckity feck!

[Beardy10]

anonymous said:

[redacted]

Commodities prices falling was very much a real world issue and not just caused by speculation. Trade finance was virtually unavailable and companies suddenly found it virtually impossible to fund working capital requirements...the net result of that was that in Q4 2008 there was a huge destocking in pretty much every industry. Companies ran down supplies or inventory to get working capital down which thus meant they didn't replenish stocks so the demand for everything from iron ore to plastic plummeted overnight. Have a look at the Baltic Dry Shipping Index.....shipping rates plummeted in Q4 2008....those rates plummeted because cargo couldn't be financed and no one was ordering anything.