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Food prices
Food prices are going up. The increase in food prices will in turn feed through to an increase in inflation and thus put pressure on the Bank of England to either keep interest rates constant or increase them.
Food prices are going up for a number of reasons, some reasons are:-
- The developing world (China etc) are now more wealthy and thus they can afford to buy products such as milk, cheese, butter and meat.
- The wet weather in Northern Europe and the dry weather in Southern Europe and other places of the world, in particular Canada and Australia, have destroyed some of the wheat crops. Thus bread will become more expensive.
- The American's are starting to convert from petrol to bio-fuels and this is using crops that would have traditionally been used for food.
This increase demand has not been met by an increased supply so prices will go up.
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