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0 pointsdoc_holliday9y ago0 comments

"inflation at current exchange rates is forecasted to go to ~3%"

I don't understand how they are calculating it to only be around 3%.

We are already noticing things to be running at around 10% in imports, and sometimes more across various things.

We import a lot in the UK; energy, food, goods.

I personally think it will be way above 3% possibly reaching double figures.

0 comments

As was said in another comment, not everything is imported and even for imported goods, not all prices will go up by 10%.Many imports are in the agriculture sector, and the current supermarket fight means that supermarkets will try to hold back price hikes as long as possible.

Measuring inflation is tricky as it affects everyone differently. The RPI is perhaps a better measure for consumers in the UK and could go a bit higher. Perceived inflation will certainly be even higher, as most people focus on prices for groceries and petrol to measure inflation, the most affected goods.

dogma11389y ago

Local food prices are also dependant on the UK being in the EU since the EU provides huge farm subsidies.

UK food prices are already fairly high even tho they are already being subsidised to match cost, many items like milk are subsidised because the supermarkets are paying below cost prices to the farmers.

That said the EU losing the UK as a trading partner won't go well either, Germany will have to find another country to sell stuff too to cover the $50 bln. loss in trade deficit if the UK implodes.

mjohn9y ago

There are several reasons why inflation might be lower than the rate of depreciation. For example not everything is imported, not all cost increases will be passed onto consumers and some retailers will try to recoup costs by having less sales and offers.

The CPI is also unlikely to be able to capture hidden inflation, such as using cheaper ingredients in food to offset currency depreciation.

These are just off the top of my head. Calculating inflation is complicated.

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