Originally published April 20, 2023 4:00 pm PDT
Food prices from inflation are the highest in 45 years.
QUICK FACTS:
- Research from the Office for National Statistics (ONS) revealed that the consumer price index (CPI) was 10.1% in March, down 10.4% in February.
- Bread and cereal prices showed an annual rate of 19.4% to March 2023, the highest prices since 1989.
- The BBC reported that severe price increases included products made with olive oil (49% increase), dairy (38% increase), and ready-made meals (21% increase).
- Prices of chocolate and hot beverages were also the highest since January 1989.
- Recreational goods and services rose by 4.6% throughout the year to March 2023.
- Overall, inflation “eased slightly in March,” according to ONS Chief Economist Grant Fitzner, likely because fuel prices fell by 5.9% leading into March.
- “The main drivers of the decline were motor fuel prices and heating oil costs, both of which fell after sharp rises at the same time last year,” Fitzner continued. “Clothing, furniture and household goods prices increased, but more slowly than a year ago. However, these were partially offset by the cost of food, which is still climbing steeply, with bread and cereal price inflation at a record high.”
WAGES FALL:
- Real wages fell 3% over the last year, according to the National Institute for Economic and Social Research.
- While wage growth was 6.6%, wages were still below the cost of living, resulting in a decline of 3.5% of wages in real terms within the public sector.
- Among the private sector, wages declined by 2.8%.
- Chancellor of the Exchequer Jeremy Hunt took the inflation figures as a sign to continue its plans for greater taxation, saying, “These figures reaffirm exactly why we must continue with our efforts to drive down inflation so we can ease pressure on families and businesses.”
- “We are on track to do this – with the OBR [Office for Budget Responsibility] forecasting we will halve inflation this year – and we’ll continue supporting people with cost-of-living support worth an average of £3,300 per household over this year and last, funded through windfall taxes on energy profits,” Hunt added.
BACKGROUND:
- The U.S. dollar’s share of global reserves fell ten times faster last year than in the last twenty years.
- “The dollar suffered a stunning collapse in 2022 in its market share as a reserve currency, presumably due to its muscular use of sanctions,” wrote CEO of the London-based asset management company Eurizon Stephen Jen.
- “Exceptional actions taken by the US and its allies against Russia have startled large reserve-holding countries,” Jen added.
