Brexit Thread

[Philippus Flavius Homovallumus]

Actually, the impacts are still happening over here and Brexit hasn't even started or happened yet officially. The pound has dropped significantly to that of the euro, all prices are rising at a minimum of 10%, in some cases, 40% We are getting the fabled "even more Austerity" being imposed upon us by the government. Scotland now pushing forward with a 2nd referendum. Our government went through a period of real instability, and the ramifications have had a profound impact on the political climate.

Price rises of between ten and forty percent?

Given that inflation is only just tipped into 1% positive I'd like some data on that, please.

Also not seen "even more austerity", noises from Hammond point in much the opposite direction.

As to the government having a period of "real instability" that's just cobblers - at no point was there not a Prime Minister, at no point did we suffer mass-resignations from the Front Bench. That happened on the OTHER side of the chamber.

You're right about Scotland, though, but then the SNP have been sounding off like a bunch of shut in cats since the election.

[Husar]

Given that inflation is only just tipped into 1% positive I'd like some data on that, please.

Inflation?
From the previously posted link: http://www.telegraph.co.uk/news/2016...r-with-unilev/

The pound has fallen 17 per cent since Britain voted to leave the EU.

Bryan Roberts, a retail analyst at TCC Global, said: “A lot of suppliers are seeking to pass on price increases to retailers but in the current environment retailers are increasingly reluctant to take it. They want to keep prices as low as they can to increase their affordability against the competition.”

Former chairman of Northern Foods Lord Haskins told BBC Newsnight that he expected food inflation of around five per cent in the next year, with discounters affected as well as the main supermarket brands.

"Despite the fact that people will grumble about paying more for Marmite, they will pay more for Marmite and that’s what the strengths of good brands are," he said.

"But then the people who pay for Marmite have got less money to pay for something else so it will affect shopper’s behaviour in a substantial way."

There you also have your broken window theory.

I don't know about Marmite, but if the pound is falling, imports should become more expensive of course, nothing to do with inflation. Certainly not if retailers are so far trying to resist. And then how is inflation calculated in the UK? Here they use some "representative goods" to calculate it. With that method, only goods included in the calculations actually impact official inflation figures for obvious reasons.

[edyzmedieval]

The rapid decline in the value of the pound fuels inflation. And inflation was at 0.6%, and it almost doubled in a couple of months.

Bloomberg - Carney looking for inflation test - http://www.bloomberg.com/news/articl...most-two-years

[Husar]

The rapid decline in the value of the pound fuels inflation. And inflation was at 0.6%, and it almost doubled in a couple of months.

I didn't say that it doesn't, I said the effect can be delayed or that inflation numbers can be misleading as far as real inflation is concerned depending on how they're calculated or what you personally buy.

edit: okay, the "nothing to do with inflation" was a bad formulation in that regard.

Oh and the inflation does also not impact prices, prices impact inflation, so you can't say that imported goods can't become more expensive due to low inflation. The same can be true for locally produced goods since inflation is just an average, single items can have a lower or higher change in price.

[edyzmedieval]

I didn't say that it doesn't, I said the effect can be delayed or that inflation numbers can be misleading as far as real inflation is concerned depending on how they're calculated or what you personally buy.

edit: okay, the "nothing to do with inflation" was a bad formulation in that regard.

Oh and the inflation does also not impact prices, prices impact inflation, so you can't say that imported goods can't become more expensive due to low inflation. The same can be true for locally produced goods since inflation is just an average, single items can have a lower or higher change in price.

Inflation in the UK's case over here is fueled by Brexit - and look at the Tesco price war with Unilever. Unilever is suffering because of the pound, leading to higher prices and lower profits. They want to offset those costs by raising prices -> inflation.

And this is just one example.

The effect will be delayed for a little while before the rest of the producers and retailers see how the government is dealing with the formal application of Brexit. Hence why some are resisting price increases for the moment.

[Husar]

Inflation in the UK's case over here is fueled by Brexit - and look at the Tesco price war with Unilever. Unilever is suffering because of the pound, leading to higher prices and lower profits. They want to offset those costs by raising prices -> inflation.

And this is just one example.

The effect will be delayed for a little while before the rest of the producers and retailers see how the government is dealing with the formal application of Brexit. Hence why some are resisting price increases for the moment.

Eh, yes, I know a bit about economics considering I'm studying something sort of economic.

I may have misunderstoof PVC since I thought he was saying that price hikes of 10-40% were not justified because inflation is only 1%. Now that I read it again he was probably saying they are not happening given that inflation is low. There are still a few possible explanations, such as the last calculation having been a while ago and so on, but it makes more sense now.

http://www.tradingeconomics.com/unit.../inflation-cpi

Apparently it is calculated monthly.

[Montmorency]

Depreciation and inflation are not exactly the same thing, basically.

[Beskar]

Price rises of between ten and forty percent?
Given that inflation is only just tipped into 1% positive I'd like some data on that, please.

Well, Unilever argument with Tesco was 10%. The 40% figure was the cost of importing bicycle parts from Japan from a BBC4 caller Bicycle UK Supplier, who is now getting the parts from an Italian manufacturer firm instead at only 25% the cost he was paying previously. There were numerous callers on this subject, and all the callers from businesses who import from outside the UK say prices for them were ranging from 10-40%, and this is currently getting swallowed by the hedge-funding and leverages the companies had in place, so they do not burden the customer with sudden price hikes, but these will be being passed on soon since said funding typically runs out after 6 months to a year. So if the situation doesn't improve, it hits our wallets.

Either way, looks like Husar beaten me to it. It is to do with the value of the pound, and the price hikes of costs/increases of importing from aboard.