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Ruin Britannia
July 6, 2010 2:11 PM   Subscribe

Britain Is Puzzled by Its Inflation Problem in a Downturn. Inflation in Britain is an economic mystery. It seems unique in the Western World which on the whole is closer to the dangers of deflation than inflation. April of this year was particularly bad - in an inflation spike that alarmed Britain, 'British price inflation including housing costs hit a 20-year high of 5.3% in April, sending shockwaves through an economy still struggling to exit recession'.

The popular press joined in being puzzled and outraged: "UK families face highest inflation in Western World as food prices rocket and pound plunges."

Nobody seems to have a good idea why. 'Bank of England policy makers are puzzled by persistently rising prices in Britain — even during the deepest recession since World War II.'

'“It’s noticeable that the U.K. is growing in the opposite direction of the U.S. and the euro zone,” said Danny Gabay, a director at Fathom Financial Consulting in London and a former author of the Bank of England’s inflation report. “Economic growth surprised on the downside and inflation on the upside. That’s a very uncomfortable position to be in.”'
posted by VikingSword (48 comments total) 7 users marked this as a favorite

 
IANAE... I thought it was well known that the program of Quantitative Easing (printing money?) by the Bank of England in a country where the a disproportionate percentage of the GDP was tied up in Financial Services at the height of a crisis firmly centred on said services would impact on what has always felt like an inflated currency.

The UK is a net importer (in a big way?). A devaluing currency means the cost of everything goes up because it's all imports. The BoE decided (had no choice?) to devalue the Pound Sterling to stave of debt issues... hence real inflation.
posted by vectr at 2:33 PM on July 6, 2010 [4 favorites]


Maybe it is just the big rich shops and so on putting up their prices to ensure their rich shareholders continue to milk the poor dry.
posted by marienbad at 2:36 PM on July 6, 2010 [1 favorite]


A devaluing currency means the cost of everything goes up because it's all imports. The BoE decided (had no choice?) to devalue the Pound Sterling to stave of debt issues... hence real inflation.

Except that the pound was not alone in the decline - the euro declined as well. Meanwhile, as this graph shows, regardless of where the value of the pound was against the euro, inflation kept going up. It doesn't add up. Currency decline has been discounted by economists as the factor responsible.
posted by VikingSword at 2:40 PM on July 6, 2010


Marienbad... my comment was pretty uninformed, but 'the big rich shops and the big rich shareholders' explanation seems even more simplistically naive than mine.
posted by vectr at 2:43 PM on July 6, 2010


The west as a whole has been walking an increasingly unsteady tightrope between deflation and inflation for the last two years. Eventually you have to fall off one side -- depression -- or the other -- inflation. The 'steady emergence from recession' scenario has not been on the cards for a long while now.

Governments are not surprised by this. It is part of The Plan. Reduce national debt and personal indebtedness by inflating it away. Yes, it erodes private capital.

Do you think they really care about that?

The next thing that happens is mortgage rates go through the roof.
posted by unSane at 2:43 PM on July 6, 2010


Look, people have been predicting and expecting inflation to take off like wildfire for a very long time now - all that money that has been printed and printed and printed and the debt kept growing and well, what? I mean, I too was expecting inflation at some point. But Krugman among others kept arguing that it ain't gonna happen anytime soon. So far, he seems to have been right. Now, if we keep predicting inflation, like a stopped clock, eventually we'll be right. But I'll admit freely that as I grow older, I'm less and less convinced that I have a real handle on anything. I can't explain what is going on - but I have enough knowledge to also understand that most of the explanations by others are bogus. We speculate, and the economy does its own thing. Economics as science makes me laugh. That Nobel prize? Should be awarded on the same occasion as when they award it to fiction writers.
posted by VikingSword at 2:50 PM on July 6, 2010


Is this similar to stagflation in the U.S. during the seventies, or does the global recession make it all different?
posted by angrycat at 2:51 PM on July 6, 2010


This topic is probably better being hashed out behind closed doors at the BoE and all over the CiF part of the Guardian's website.

A simplistic analysis, however, would note that there was a massive amount of wealth destruction in the UK economy. Lots of pensions and assets (ie. shares and property values) were downgraded in value.

Perhaps Marienbad is right. Inflation is high because vested interests want to claw back some capital as fast as possible. I'll leave it to economists to weave yoghurt baskets to explain it in detail.
posted by vectr at 2:54 PM on July 6, 2010


Honestly, what should a person do with their savings? Nothing? Gold is near an all time high, houses are out of reach and apparently education is no longer a good investment.
posted by 2bucksplus at 2:54 PM on July 6, 2010 [2 favorites]


Governments are not surprised by this. It is part of The Plan. Reduce national debt and personal indebtedness by inflating it away. Yes, it erodes private capital.

Paying for our GDP debts in inflation will push our currency value down as the relative value of foreign reserves decreases. Leading to more inflation due to our entire economy being based on imports. I suppose this does fit the usual pattern of doing anything that will stop us rioting for another couple of years though.

Here's my uninformed theory. Importers are putting prices up because they can. The recession brought instability to the market and reduced short term demand so they jacked prices up to compensate for their revenues. The recession ebbed and demand rose despite the increased prices, so they continued to increase prices. This is further driven by the reduction in credit liquidity which increases the cash risk to importers so the risk adjusted price of imports also rose. The net result is a lot of momentum for increasing prices right now. I think this will die off over the next 18 months, especially with phrase "austerity measures" in the news everywhere.
posted by public at 2:54 PM on July 6, 2010


Importers are putting prices up because they can.

But how can imports be driving the inflation, when as the article says, it's inflation in services:

"Higher commodity prices were not unique to Britain, and the euro has also slumped against major currencies, albeit more recently. Some economists also pointed out that price increases were especially strong in the service sector, pushing up expenses like insurance premiums, which are not directly related to currency exchange rates.

“The inflation issue recently has been higher levels of service sector inflation,” said Stuart Green, chief British economist at HSBC in London. “That’s very unique to the U.K.”
[emph. mine, VS]
posted by VikingSword at 3:03 PM on July 6, 2010


I'm reminded a little bit of Johnathan Strange and Mr. Norrell where magic is a dead science that's still practiced by a bunch of theorists who scour old magical tomes and (despite not being able actually do anything) give each other a lot of awards and attend conventions and swap newsletters and stuff like that (within the setting of turn-of-the-century Victorian England).

That's always what economics has reminded me of. A bunch of people with a bunch of complicated theories who can't actually do anything useful in practice. Perhaps I'm being a bit too harsh.
posted by codacorolla at 3:08 PM on July 6, 2010


I suppose this does fit the usual pattern of doing anything that will stop us rioting for another couple of years though

Winner, winner, chicken dinner.
posted by unSane at 3:10 PM on July 6, 2010


Most people still have jobs.

The inflation is likely tantamount to 'we got skills and infrastructure... pay up'
posted by vectr at 3:10 PM on July 6, 2010


Economics as science makes me laugh. That Nobel prize? Should be awarded on the same occasion as when they award it to fiction writers.

No, because unlike the prize for literature, the Sveriges Riksbank Prize for Economics in Memory of Alfred Nobel is not a real Nobel prize.
posted by atrazine at 3:11 PM on July 6, 2010 [2 favorites]


VikingSword: "That Nobel prize? Should be awarded on the same occasion as when they award it to fiction writers."

Importantly, there is no Nobel prize for economics. There's a "Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel" created in 1969 70 years later to correct Nobel's mistake in not endowing their field, but it's arguably against the spirit of Nobel's will. Many have impugned it as overly political and the field far too unscientific to confer such authority to. In the absence of repeatable scientific tests, we have many untestable theories put forth for every scenario, and the Nobel's act of choosing one (ie Krugman in 2008) perhaps confers more influence in the field than the underlying work. Anyone remember what Krugman's publications were?
posted by pwnguin at 3:15 PM on July 6, 2010


Austerity measures won't necessarily decrease inflation, if the driving force behind inflation is the service sector increasing prices in response to increased economic uncertainty. Rather cutting benefits, jobs, housing could serve to reduce consumer spending, further increasing uncertainty, and leading the FIRE sector to increase fees again in order to compensate.
posted by Grimgrin at 3:16 PM on July 6, 2010


Yes, I'm aware of the Nobel prize / economics controversy, but that's how it's commonly perceived, a perception promoted by none other than the official Nobel org., so I rolled with that.
posted by VikingSword at 3:26 PM on July 6, 2010


Rather cutting benefits, jobs, housing could serve to reduce consumer spending, further increasing uncertainty, and leading the FIRE sector to increase fees again in order to compensate.

But it's a bedrock of classical theory that when you reduce demand, prices must fall for competitive goods. And the entire British economy is not protected. So why don't the prices, and therefore inflation, fall?
posted by VikingSword at 3:29 PM on July 6, 2010


Maybe it is just the big rich shops and so on putting up their prices to ensure their rich shareholders continue to milk the poor dry.

This is silly because "big rich shops" always charge as much as they possibly can. There's no extra margin where Tesco and the like could make money, but out of the goodness of their hearts, choose not to.
posted by I_pity_the_fool at 3:31 PM on July 6, 2010 [1 favorite]


I've been waiting to see something like this in the States.


A simplistic analysis, however, would note that there was a massive amount of wealth destruction in the UK economy. Lots of pensions and assets (ie. shares and property values) were downgraded in value.

Quantitative easing turned what would have been wealth destruction into wealth transfer. Since the total amount of wealth did not decline by nearly as much, if at all, as people lost from home equities and pension funds, that wealth must have ended up elsewhere-- and in very liquid form.

Now, all that liquidity is purchasing housing, and the fact that it is housing shows us, in my opinion, that the transferred wealth ended up in the hands of people outside Britain, people who think Britain would be a very nice place to have a second or third home.

In other words, wealthy foreign elites.
posted by jamjam at 3:37 PM on July 6, 2010


Wow, I was unaware that Britain was facing significant inflationary pressure. I wonder what it is that makes the service sector's pricing so much more elastic over there that they can just raise prices, apparently without any particular reason?

Do you have a lot of empty houses over there like we do? All the foreclosures seem to provide contradictory pricing pressures. On the one hand, it pushes purchase prices down. On the other hand, because a lot of these foreclosures were rental properties now off the market, it's keeping rent up.

I can't even count the number of rentals that are vacant because the owner walked away and the bank can't be bothered to hire a property manager to rent it out.
posted by wierdo at 3:41 PM on July 6, 2010


But it's a bedrock of classical theory that when you reduce demand, prices must fall for competitive goods.

Who says the goods are competitive? There is often an information premium associated with switching something, like, insurance for example. How much would someone be willing to pay to avoid researching other insurance companies, studying their plans, and so on?

Also, if companies see their competitors raising prices, they're likely to raise prices as well if they think they can 'get away with it'. The whole rational actor model is kind of silly.

Also, devaluing a currency, which the UK can do, is a good way to boost the economy.

Anyway, as far as rich people trying to claw their way back, inflation hurts the rich more then it does the poor. It creates an incentive to spend the money you've got, since you can't just keep it which boosts demand. It incentivises investment in businesses instead of hording bonds, etc. And wages tend to go up. It's fantastic for people who have a lot of debt (so long as the interest rates are fixed)

Obviously runaway hyperinflation isn't helpful, but moderate inflation, especially now wouldn't be the end of the world.
posted by delmoi at 3:43 PM on July 6, 2010


people who think Britain would be a very nice place to have a second or third home.
There surely can't be too many of these. Have they seen this place of a Friday night?
posted by bonaldi at 3:49 PM on July 6, 2010


Who says the goods are competitive?

Unless it's a closed economy, most of the goods are going to be open to competition. That's what distinguishes a closed from an open economy - that the majority of economic activity is open to competition. Yes, of course there are always sectors which are impervious, and frequently there are impediments to free competition, but the overall effect remains, otherwise you're talking about a closed economy.
posted by VikingSword at 3:51 PM on July 6, 2010


Doesn't every damn thing in the UK always cost more than in Europe or America?
posted by A189Nut at 3:52 PM on July 6, 2010


VikingSword: Well clearly that money is not going to workers since wages continue to stagnate. I expect it's just risk aversion. Everyone is trying to hoard their money for the next dip. Food is fairly price inelastic outside of luxuries and so is insurance for a very large class of insurance we actually buy due to regulatory pressure and long term premiums. It's easy to hike prices in those industries when there is not significant market pressure not to.

Of course this doesn't explain why the rest of the eurozone is going the other way. I'm even less familiar with the european financial situation than the British one but government bond rates are much lower in the eurozone and I expect that the credit market is in better shape generally too. I think this is probably a good example of the € doing exactly what it is supposed to.
posted by public at 3:53 PM on July 6, 2010


VikingSword: IANAE, so you may be spot on with your critique. Here's my thought process though, mostly regarding the products of the FIRE sector.

In classical economics there's also the production cost, once the price goes below the production cost people stop producing, restricting supply and driving prices up until some sort of equilibrium is reached.

If you think of the production cost of a loan it's the cost to the bank to borrow the money, plus the expected loss from defaulting loans. If the banks make the calculation that loans are riskier, it's the same as driving up the production cost.

Also, a bad economy does not necessarily reduce demand for the products of the service sector. People still need to insure their house, get lines of credit and the like.
posted by Grimgrin at 3:55 PM on July 6, 2010


I can tell you from direct experience of buying and selling in the UK housing market right now - the issue is almost complete lack of supply. The rare people selling seem to be probate (ie dead), downsizing, or moving area for some reason.

The reason, to my mind, is that when the crash happened, there was an almost immediate correction in house prices, whereby they fell in real terms (primarily driven by commercial inventory being written off by developers on the edge of their debt thresholds); private buyers, faced with negative equity, would prefer not to sell at the bottom of the market. Subsequently, private debtors have been protected through very low interest rates (people on tracker mortgages are paying next to nothing) and also through direct debt protection schemes. Nobody who really doesn't want to sell is feeling pressure to do so, and at any rate if house values are recovering houses are as good an investment as any right now.

There are some cash rich buyers out there (and ironically you'd have been better off putting cash in property, post correction, than in many other places) but I doubt demand has massively increased, given the almost complete shutting off of highly leveraged individual mortgages - and flow through of supply is very low indeed.
posted by slimshady at 4:02 PM on July 6, 2010


In all seriousness: how can I make money off of this?
posted by wcfields at 4:12 PM on July 6, 2010


France is also having trouble with excessive foreign demand for its real estate:

PARIS — Many people buy a pied-à-terre in Paris to use for a few weeks a year and to rent the rest of the time. Most of them don’t realize, however, that they are breaking the law — something city hall now is trying to address with a new, more direct approach to enforcement.

Mayor Bertrand Delanoë, expressing concern about the lack of affordable housing in the city center, ordered an agency last year to warn property owners that renting out residential apartments for less than a year at a time violates French law. Those who ignored the warning, he said, would be prosecuted.

posted by jamjam at 4:33 PM on July 6, 2010


You're saying wealthy foreign elites are buying second homes in Britain? Dear god why? I'll grant Britain has cute places that warrant serious tourism, maybe once or twice during a lifetime, but who'd actually choose living there voluntarily? Russians? New Jersey residents? Are there any less hospitable places where people might have money?

Britain's housing market desperately needs either a massive crash or massive inflation, most likely they'll get the inflation. I've also theorized that British export interests need 1£ well below 1€ before merging currencies.
posted by jeffburdges at 5:07 PM on July 6, 2010


UK inflation is indeed a bit of a conundrum but I'm still kind of surprised that policymakers haven't considered at least modifying their approach to inflation targeting. For me it's just another example as one of the things the recession should have changed, but hasn't (eg the banking system).

Central banks' slavish devotion to targeting inflation seemed entirely proper after two decades where we saw the destructive effects of quickly rising prices. But the doctrine became too rigid and it meant they missed the formation of huge asset bubbles in Western economies during the 2000s, and even if they hadn't missed them, inflation targeting gave them no mandate to act against it.

Anyhow, the point I'm making is that we too are now conditioned into thinking that inflation more than 1 percent over the Bank's 2 percent target = bad. The governor has to write a letter to the chancellor to explain why he's failed -- oh no!!!!

Look at it this way. There were still members of the BoE's monetary policy who voted to hike interest rates in July and August 2008 citing high inflation (namely Tim Besley), when every other indicator of the economy was pointing to a marked slowdown in growth ahead, perhaps even prospect of a recession.

That is crazy. Blanchflower, dismissed by the rest of the MPC as a nutty labour market economist, got it right in warning them to focus less on inflation and get ahead of the curve by supporting growth with lower rates. Imagine if they actually had raised rates in July/Aug 2008 only to get hit by Lehman in Sept.

In some ways, the MPC are faced with a similar circumstance to mid-2008 -- high inflation but forward looking surveys (eg, PMIs, Sentix) in the UK, euro zone and US are pointing to a marked slowdown in growth in the second half as austerity measures take out a good heap of money from the economy.

And like in 2008, you have a member of the BoE MPC calling for a rate hike (Sentance).

Inflation targets are in fact fairly arbitrary. The 2 percent target was basically dreamed up as "feeling right" during the years where growth was steady and the thought of fiscal crises seemed remote.

Don't listen to the quote in the post from Danny Gabay -- it's overly simplistic and smacks of soundbiteness. He makes it sound like the euro zone and US are doing better growth-wise than the UK. That's true only of the US. And even there, there's some really worrying signs (check out last Friday's non-farm payrolls).

I know Governor Mervyn King is losing the battle against guys like Sentance (and the media) to persuade people that inflation spike is just temporary, but he made a sound point last month:

"A continuous rise in prices would ordinarily be associated with strong money growth, wage inflation, rapid increases in money spending and an excess of demand over the supply capacity of the economy."

"The UK economy exhibits none of these traits."


Maybe it is temporary, maybe it isn't.

I can forgive the media for getting carried away about the inflation argument right now (they don't know better), but how economists -- even ones sitting on the MPC -- can contemplate hiking rates to tackle inflation right now, is beyond me.

You'd have thought the recession would have taught them something.
posted by TheAlarminglySwollenFinger at 5:28 PM on July 6, 2010


Anyone remember what Krugman's publications were?


Well yes, quite a lot of people do. More than is the case for most prizes I expect.

Krugman didn't get his Nobel for writing in some syndicated column. The prize was awarded for: "By having integrated economies of scale into explicit general equilibrium models, Paul Krugman has deepened our understanding of the determinants of trade and the location of economic activity."

As for inflation in the UK, well I'll just say that if the professional economists can't quite work it out, I don't expect I'm going to get a lot of insight from here. Novel theories, sure...
posted by wilful at 6:58 PM on July 6, 2010 [2 favorites]


That's always what economics has reminded me of. A bunch of people with a bunch of complicated theories who can't actually do anything useful in practice. Perhaps I'm being a bit too harsh.

I'm the last person to defend economists, but you really need to learn a something about the field if this is what you think it's like.
posted by smoke at 8:51 PM on July 6, 2010


jeffburdges: "You're saying wealthy foreign elites are buying second homes in Britain? Dear god why? I'll grant Britain has cute places that warrant serious tourism, maybe once or twice during a lifetime, but who'd actually choose living there voluntarily? Russians? New Jersey residents? Are there any less hospitable places where people might have money?"

You've got a grudge against the UK or something Jeff? :)

Slightly more seriously, the UK is as a country which is open to foreign capital where the rule of law is well established. It has a record of long term internal stability that few other countries in the world can match: We were last invaded a millennia ago, haven't defaulted on government debt in centuries (well, there might be a technical default in the 30s, but it was voluntary, so it's not clear whether that counts) & the last revolution was 450 years ago. London is one of the major world capital cities, with all that entails.

If you're a Russion oil magnate, or a Saudi price, or anyone else with piles of money in a potentially unstable state, then the UK looks very attractive indeed I suspect.
posted by pharm at 2:07 AM on July 7, 2010


Dear god why? I'll grant Britain has cute places that warrant serious tourism, maybe once or twice during a lifetime, but who'd actually choose living there voluntarily? Russians? New Jersey residents? Are there any less hospitable places where people might have money?

I'll respectfully say that you don't know what you are talking about. Seeing that you live in France makes your comment even more suspect. :)

For one, I chose to live here voluntarily. And I have a job that allows me to live anywhere in Europe. I chose Britain. For many reasons. The quality of life is very high here. People oddly have a chip on their shoulder about the U.K. and even if you twist their arm they won't admit that:

- The quality of food and eating here has, in the past decade or so, become one of the best in Europe. Markets bring in fresh dairy and vegetables and breads and fish from the coasts. The influx of EU people from Italy and Spain and France and Portugal and Eastern Europe has brought in an astonishing diversity of cooking. Paris, meanwhile, has remained fairly stagnant (yes, despite the rise of bistronomiques) relying more on its past reputation.

- The weather here is cold winters and warm, but not hot, summers. The same as Paris, really. I much prefer this weather to when I lived in NYC with its stifling hot humid summers like walking through soup. It is rainier here than most places but the upside of that is that the countryside is amazingly green and lush. And with this nation's obsession with walking, there are lots of well-marked places to go. I grew up in coastal San Diego which probably has the most perfect weather on the planet - so you can't accuse me of escaping "New Jersey"

- The government here is fairly stable and responsive. I'm happy that a party like the Lib Dems have any power at all. I love Italy but living under a government like Berlusconi's would be an absolute nightmare. We considered living in Spain too. The government there is fairly enlightened.

- We buy food and cook. And we haven't noticed any rise in food prices. Actually, a decline in many things. I know that contradicts the subject of this post. But its my word against the Daily Mails. Really, if the best source you can find is the Daily Mail, then it likely is not true.

- Museums are free.
posted by vacapinta at 2:19 AM on July 7, 2010 [3 favorites]


- The government here is fairly stable and responsive.

You must be new around here.
posted by public at 2:33 AM on July 7, 2010


First of all – what inflation measures is the change in prices of a “basket” of goods, which a “typical” consumer is thought to purchase. This basket is called the Consumer Price Index (CPI), is internationally comparable and what the Bank of England uses in its target measures with the aim of keeping inflation within 1 to 3% bank.

My 2p:

Inflation in the UK has remained in positive territory since the beginning of the financial crisis. IIRC, the lowest it has been in the last few years is 1%. This is surprising given that we have experienced a deep recession over the period. From what I’ve read, this can maybe be explained by a few things:

- Depreciation of sterling, which has already been discussed, but imo cannot be discounted due to the sheer number of goods – mostly priced in USD, which has been very strong for the past year and a half or so - that are imported into the UK. Many economists believe the effects of this have mostly been fed through by now.

- The increase in global commodity prices - which are priced in dollars - notably oil and energy costs. Petrol prices in the UK are about 60% tax, so the oil price will not have as discernable influence on petrol prices as it makes up a much smaller proportion of the actual cost than, say, the price of gas in the US. The UK is highly dependent on importing natural gas from Russia and other politically instable places and are currently paying top dollar.

- Tax increases, more notably the return of the VAT rate to 17.5% from 15%

Additionally, consumer spending has remained resilient during the downturn. I think this is due to lower levels of unemployment when compared to the Eurozone and the USA. The bigger problem is underemployment – companies are hoarding workers but perhaps cutting their hours or even their wages. So people may not be making more, but they are still employed, and still spending. Also, interest rates in the UK have been at record lows for some time now, which has affected consumers and firms positively. Indeed, lower mortgage costs have caused many homeowners to find themselves to be better off on a monthly basis.

This recent talk given by a member of the MPC states that the stability in price inflation experienced between 1993 – 2007 was unusual, and the recent volatility is more within the norm. An informative read for those interested.

I think inflation will stay pretty steady. The government has begun to raise taxes and have indicated they will continue to do so. They’re delaying these increases (such as the VAT rise to 20%) to keep inflation under control, but I think we’re going to continue to have these “one-off” events which will keep inflation at least steady for the near future. The other big factor is the outlook for both sterling and the dollar which is really anyone’s guess.
posted by triggerfinger at 3:58 AM on July 7, 2010 [2 favorites]


Sorry, here is the BOE paper.
posted by triggerfinger at 4:01 AM on July 7, 2010


Apparently there are 51 recognisable national groups buying upmarket residential property in London at the moment. A lot of Greeks recently for obvious reasons; and it seems the French go for Wapping.
posted by Phanx at 8:09 AM on July 7, 2010


triggerfinger, that's a nice writeup. I do wonder what the new austerity measures promised by Cameron will do for inflation over the next 18 months or so. It's tempting to say that it'll take time for any effects to work themselves through the economy, but surely there must be some anticipatory activity already, just based on government projections.
posted by VikingSword at 9:32 AM on July 7, 2010


VikingSword wrote: "triggerfinger, that's a nice writeup. I do wonder what the new austerity measures promised by Cameron will do for inflation over the next 18 months or so. It's tempting to say that it'll take time for any effects to work themselves through the economy, but surely there must be some anticipatory activity already, just based on government projections."

If the austerity does exactly the opposite of what its proponents claim it will (which I think it should) it should help get inflation down, presuming the pound doesn't confound things. If it turns out to be stimulatory in nature, it will not, as pent up private money gets spent.
posted by wierdo at 10:33 AM on July 7, 2010


To all those dissin' me.* IANAE. Clearly it was not meant to be taken seriously, but did anyone actually figure out why this is happening, why prices are shooting up? PLease let me know if you did.

* I have a lyric by either Run DMC or Public Enemy in my head which I can't make out clearly but if I could it would be written here. If anyone knows which lyric I mean, again, let me know before i go crazy.
posted by marienbad at 2:15 PM on July 7, 2010


It seems unique in the Western World which on the whole is closer to the dangers of deflation than inflation.

Greece had a 5,2% in June (part of which was due to tax raises) and the rate's been higher for the last couple months than the IMF predictions.
posted by ersatz at 2:26 PM on July 7, 2010


We can chat about food if you like, sure. :)

I've lived in Birmingham and Manchester, but never spent much time in London. Yes, I'm aware that it doesn't rain all the time in London, Leeds, etc. You usually pay through the nose for good wine, cheese, vegetables, and bread in England, probably even worse than the U.S., but yes they're available if you live near the right grocery. Olives are a lost cause of course.

In fact, I'm quite fond of good traditional British food too, but it's frighteningly rare. Manchester had precisely one fancy pub with killer corned beef hash, etc., named Sam's Chop House. Aside from them, I've only ever found good British food in country pubs.

Pakistani food was remarkably good all over Britain of course, but honestly I preferred the wider diversity of Indian food that exists in New Jersey. I'll agree that oriental restaurants are often good in Britain, but still not U.S. levels for quality and diversity.

Yes, continental countries are abysmally lacking in good foreign food. I've otoh never found good Italian, French, Greek, Spanish, Turkish, etc. food in Britain either, maybe passable Italian. Manchester had a very nice Russian restaurant.

I'll also grant that Paris cuisine isn't terribly special usually, but nevertheless any random meal in Paris will usually beat meals that are twice as much in Britain.. and you're golden if you know the good cheap places. I lived longer in Lyon than in Paris btw, Lyon is truly remarkable.

Btw, you can quickly eyeball restaurants in Paris by peeking at their *cut* bread, avoid any restaurant using those spongier fake baguettes.
posted by jeffburdges at 5:27 PM on July 7, 2010


I think, from what others tell me, that a lot has changed recently here in the UK. So, a lot depends on when you were last here.

The whole gastro-pub phenomenon is still relatively new. Still, I can honestly say that one of the top 5 meals I have ever had in my life was at a pub, the Sportsman.

Likewise, its much easier to get cheap, good street food, at least here in London. All the stands at Camden Lock, Brick Lane's UpMarket, Borough Market and smaller ones such as Exmouth Market, Broadway Market etc. There's also cheap, great Ethnic food to be had.

I do agree a random little bistro in Paris will have better food than a random place in Britain. Consistency is still lacking here. And there are still too many people who value "atmosphere" over food. I'm just saying that, for those who have done their homework, the food here is as good as anywhere else.

And I agree about Lyon. My wife and I are considering spending a week there.
posted by vacapinta at 4:49 AM on July 8, 2010


Ah, jeffburdges, you're talking about The North, I've heard of that.

Seriously, I'm not saying England=London, but everything you've said would be subverted if you were to live in London or the Home Counties for a few months.
posted by Quantum's Deadly Fist at 1:40 PM on July 8, 2010


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