Shop Prices Go Into Inflation Mode At 4.4% Annually

[Realistbear]

http://www.bloomberg.com/news/2010-11-03/u-k-october-shop-prices-rise-most-since-january-on-commodities-brc-says.html

U.K. October Shop Prices Rise Most Since January on Commodities, BRC Says

By Svenja O’Donnell - Nov 3, 2010 12:01 AM GMT

U.K. shop prices increased the most since January last month as the higher cost of commodities such as wheat and meat products forced retailers to raise prices, the British Retail Consortium said.

Prices of goods in stores rose 2.2 percent last month from a year earlier, compared with a 1.9 percent gain in September, the BRC said in an e-mailed statement. On the month, prices climbed 0.3 percent. Food prices rose an annual 4.4 percent, the most since June 2009.../

The Bank of England is this week forecast to keep interest rates and the emergency bond-purchase program unchanged as policy makers mull whether to focus on inflation or growth. While the deepest government spending cuts since World War II are threatening the U.K. recovery, the economy still grew twice as much as forecast in the third quarter. Inflation has exceeded the government’s upper 3 percent limit for seven months.

Merv will probably react to this news with vigilance and steely determination not to increase IR and derail HPI which is now the only hope for our economy. Unless, of course Merv gives into the force and allows the bubble to DE-flate.

Edited November 3, 2010 by Realistbear

[aa3]

Increasing house prices to fund Home Equity withdrawal and mortgage refinance/consolidation is the only way these guys know of boosting the consumer economy.

It worked for a decade. Without that we would have to do the unthinkable.. raise real wages to drive the consumer economy. And thats not going to happen in our lifetimes.

[Dorkins]

raise real wages to drive the consumer economy. And thats not going to happen in our lifetimes.

A 50% drop in house prices would be a very substantial rise in real wages.

[non frog]

A 50% drop in house prices would be a very substantial rise in real wages.

Only if MEW is not 40% of your household income

[winkie]

Find a local farmers butcher and cut out the middle man.

[The Masked Tulip]

I was about to start a thread about Christmas shopping.

I don't know about you lot but it is not looking a lot like Christmas in my part of the World. Usually by early October the shops are all decked up in Christmas decorations and they are filled with all the clothing and tat that they wish to sell before December 25th.

I am quite shocked by how many of the chain stores have virtually no decorations or re-stocking of stuff for Christmas - and it is November. Haven't seen a November like this in the shops for 20 years.

[@contradevian]

Of course the inflation figures do not take into account the reducing portions. In a little survey of mine, Walkers crisps, turkish delight, chicken portions in M&S, Radox bath foam and shower gel are getting noticably smaller! REAL inflation is probably nearer 10% when you take into account, less for more.

[The Masked Tulip]

Of course the inflation figures do not take into account the reducing portions. In a little survey of mine, Walkers crisps, turkish delight, chicken portions in M&S, Radox bath foam and shower gel are getting noticably smaller! REAL inflation is probably nearer 10% when you take into account, less for more.

M&S chicken portions are tiny now. Well over-priced IMPO.

[Realistbear]

I made the plunge and bought a 42 inch Plasma recently--a higher end Panasonic for £675 with a 5 year warranty etc. This set was around £1k earlier in the year. Seems that consumer goods at the higher end are still dropping while basics rise.

BTW--tried a LCD and it was as awful as I had convinced myself they were for all the years I resisted buying one. Panny's new neoplasma rnage, borrowed in part from exiting Pioneer, is really very good.

That said--inflation in the basics will push us back into recession which will curtail and big moves in overall inflation as people don't buy when they have no jobs.

I buy nearly all my meat and basics from Costco in Croydon. Save a fortune and get restaurant quality--often reduced heavily if you don't mind short dates and put the stuff in your freezer.

Edited November 3, 2010 by Realistbear

[headrow]

Merv will probably react to this news with vigilance and steely determination not to increase IR and derail HPI which is now the only hope for our economy. Unless, of course Merv gives into the force and allows the bubble to DE-flate.

LONDON (SHARECAST) - High street fashion giant Next will raise its prices by 8% early next year due to soaring cotton prices.

"As a result of further rises in the price of cotton, retail price rises are likely to be at the top end of our previously stated 5% to 8% range for the first quarter of next year," the firm commented.

How long prices stay that high, or even go higher, will depend on the longevity of what Next describes as "a speculative bubble in cotton prices".

The price hikes will add to growing fears over inflation and consumer spending with a VAT increase to 20% already on the way in the New Year.

The comments overshadowed a solid third quarter update with sales growth of 2.2% towards the top end of its indicated 0-3% guidance.

Once again, good sales through its directory carried its shops business. Retail sales fell by 3.3%, like-for-like, in the three months to end October, though this is within Next's previous indicated range. Directory sales rose by 7.9%, right at the top of expectations.

Profits are in line with previous forecasts. Next left unchanged its estimate of a total between 535m to £560m for the year to January 2011, with earnings per share tipped to grow by between 14% and 19% to 214p to 224p

[winkie]

I was about to start a thread about Christmas shopping.

I don't know about you lot but it is not looking a lot like Christmas in my part of the World. Usually by early October the shops are all decked up in Christmas decorations and they are filled with all the clothing and tat that they wish to sell before December 25th.

I am quite shocked by how many of the chain stores have virtually no decorations or re-stocking of stuff for Christmas - and it is November. Haven't seen a November like this in the shops for 20 years.

You are right I popped out yesterday and the shops were full of what looked liked last years tat...I was speaking to this guy that had rented out a space in the walkway of a shopping centre selling his wares, not doing much business yet, he was saying that he has to pay £6k per month for the pitch that is before he has sold anything....how can these people make money to survive...I think this year will be harder for many.... Maybe we should all look to doing things differently.

[The Masked Tulip]

I made the plunge and bought a 42 inch Plasma recently--a higher end Panasonic for £675 with a 5 year warranty etc. This set was around £1k earlier in the year. Seems that consumer goods at the higher end are still dropping while basics rise.

BTW--tried a LCD and it was as awful as I had convinced myself they were for all the years I resisted buying one. Panny's new neoplasma rnage, borrowed in part from exiting Pioneer, is really very good.

That said--inflation in the basics will push us back into recession which will curtail and big moves in overall inflation as people don't buy when they have no jobs.

On the other hand, laptops are going up in price. You used to get a good spec basic laptop for £400 but now that is nearer 550 if not 600 quid.

Also, they can't be selling many as there should have been a move to the newer i5 chip in laptops by this time and a subsequent drop in prices of both the i5 and i3 - i.e the i3 drops down the price range to about £300 and the 500 quid laptops which have had i3s in for the last year or so now have the better i5.

But this hasn't happened. I suspect it is because they have so much unsold stock.

[winkie]

Of course the inflation figures do not take into account the reducing portions. In a little survey of mine, Walkers crisps, turkish delight, chicken portions in M&S, Radox bath foam and shower gel are getting noticably smaller! REAL inflation is probably nearer 10% when you take into account, less for more.

But everything is staying at a £1 but you are getting far less for the pound....both in weight and quality....that's inflation for you.

[aa3]

A 50% drop in house prices would be a very substantial rise in real wages.

For new buyers it is.

[The Masked Tulip]

Maybe we should all look to doing things differently.

What - you mean like Tony Curtis with Laurence Olivier in Spartacus?

[winkie]

What - you mean like Tony Curtis with Laurence Olivier in Spartacus?

Link please.

[General Congreve]

I was about to start a thread about Christmas shopping.

I don't know about you lot but it is not looking a lot like Christmas in my part of the World. Usually by early October the shops are all decked up in Christmas decorations and they are filled with all the clothing and tat that they wish to sell before December 25th.

I am quite shocked by how many of the chain stores have virtually no decorations or re-stocking of stuff for Christmas - and it is November. Haven't seen a November like this in the shops for 20 years.

Up to 70% off all round down here too, if your shop isn't already closed down

[exiges]

I don't know about you lot but it is not looking a lot like Christmas in my part of the World.

Agreed.

[The Masked Tulip]

[The Masked Tulip]

I appear to have killed this thread - but I ain't prepared to let it die.

Wibble!

[Dorkins]

So December cotton futures cost $1.39 a pound, or £1.90 per kg. If a pair of jeans weighs about half a kilo, the cost of all the raw cotton to make a pair of jeans is about 95p. A pair of cheap Next jeans costs around £20. Clearly it is not really cotton prices that are driving 8% inflation in Next clothing.

[scappers]

Merv will probably react to this news with vigilance and steely determination not to increase IR and derail HPI which is now the only hope for our economy. Unless, of course Merv gives into the force and allows the bubble to DE-flate.

I'm not so sure anymore. The housing market has been dead for 2 years yet we're still getting growth.

Oh, and it's not xmas until Starbucks sell the gingerbread latte. That's the official definition I'll have you know.

Edited November 3, 2010 by scappers

[Snugglybear]

So December cotton futures cost $1.39 a pound, or £1.90 per kg. If a pair of jeans weighs about half a kilo, the cost of all the raw cotton to make a pair of jeans is about 95p. A pair of cheap Next jeans costs around £20. Clearly it is not really cotton prices that are driving 8% inflation in Next clothing.

Can I just say that the only time I buy Next clothes is at their sale (at least 50% off, preferably 70%). Or on ebay when nobody else bids so it's 99 pence + postage.

Why would anyone pay full price for Next clothes? They're no better quality than Peacocks.

[dnjc]

i think the perceived relation of GDP growth to HPI has the biggest inflation of all.

does anyboby know the contribution of residential houses to GDP?

[winkie]

Can I just say that the only time I buy Next clothes is at their sale (at least 50% off, preferably 70%). Or on ebay when nobody else bids so it's 99 pence + postage.

Why would anyone pay full price for Next clothes? They're no better quality than Peacocks.

You can buy on ebay with the label still attached....either had second thoughts, impulse buy or outgrew it.