Politics, politics, politics (so long and thanks for all the fish)

[P.D.]

Food inflation is 18-19% even higher than RPI. Some of that is Ukraine and getting fertilisers that were manufactured in Russia/Ukaraine etc and disruption to grain exports etc. But it is also that food costs more to transport to and from the EU because there is a lot more red tape and time needed to complete the trade. That pushes up prices....also known as inflation.

If you can not access a labor pool of 500m people in the EU, for example taking on people for the catering industry, chefs, waiters or nurses...etc. it pushes up wages because businesses become desperate to recruit people from the smaller available pool of people. Wage increases are the businesses' only option to attract staff in many instances, so this adds to inflation.

There are countries in the EU with similarly high food inflation like Germany, I don't think Brexit helps and has probably contributed to it but it's not the sole cause.

This is EU food inflation overall taken from https://tradingeconomics.com/european-union/food-inflation

 

[SpurMeUp]

There are countries in the EU with similarly high food inflation like Germany, I don't think Brexit helps and has probably contributed to it but it's not the sole cause.

This is EU food inflation overall taken from https://tradingeconomics.com/european-union/food-inflation

Guess you are just backing up what I said? Most of the food inflation we are seeing isn't Brexit related - this is true. But some is. Probably only 2-3% of the food inflation we see is Brexit related. Though we still are open to imports. Its an unfair setup - our exporters face checks on goods going to the EU. Their exports to us get waived through creating unfair competition. But if we put up barriers it may increase costs further.

The whole thing is a waste of time, I am sure you can agree. Or you can outline the benefits?

 

[P.D.]

Looks like Thames Water about to go bankrupt, new CEO is ex head of OFWAT as well - you couldn't make it up.

The regulatory bodies might as well not exist, I read only yesterday that the one overseeing broadband/phones haven't even bothered to investigate why prices are allowed to rise mid contract or why they all added an extra 3.9% increase over inflation - https://www.theguardian.com/busines...lecoms-firms-imposing-inflation-busting-bills

 

[Diamond Lights]

Guess you are just backing up what I said? Most of the food inflation we are seeing isn't Brexit related - this is true. But some is. Probably only 2-3% of the food inflation we see is Brexit related. Though we still are open to imports. Its an unfair setup - our exporters face checks on goods going to the EU. Their exports to us get waived through creating unfair competition. But if we put up barriers it may increase costs further.

The whole thing is a waste of time, I am sure you can agree. Or you can outline the benefits?

exactly this. not saying it's solely down to Brexit, it's just making a bad situation worse, and that 2-3% worse translates through to quite substantial at the end of the day.

The brexit supporters on the right will then espouse "it was never a short term success, it was all about long term gain". They just never specify what that actually means in the long term, and completely ignores the successive governments that will follow to try and polish a turd.

 

[scaramanga]

Guess you are just backing up what I said? Most of the food inflation we are seeing isn't Brexit related - this is true. But some is. Probably only 2-3% of the food inflation we see is Brexit related. Though we still are open to imports. Its an unfair setup - our exporters face checks on goods going to the EU. Their exports to us get waived through creating unfair competition. But if we put up barriers it may increase costs further.

The whole thing is a waste of time, I am sure you can agree. Or you can outline the benefits?

At what point in the last 12 months did Brexit happen?

 

[SpurMeUp]

At what point in the last 12 months did Brexit happen?

It is "happening" all the time as companies adjust their pricing and deal with the new setup, or withdraw or move. It is not a big bang, but a gradual adjustment/realignment. Some EU companies just wound down their exports to the UK altogether. Others had contracts to service and then adjusted pricing etc etc etc.

FWIW London School of Economics puts the % of food inflation caused by Brexit, a lot higher than our conservative guesses, at one third. https://www.bloomberg.com/news/arti...food-price-inflation-lse-paper-says#xj4y7vzkg

 

[Gutter Boy]

Looks like Thames Water about to go bankrupt, new CEO is ex head of OFWAT as well - you couldn't make it up.

The regulatory bodies might as well not exist, I read only yesterday that the one overseeing broadband/phones haven't even bothered to investigate why prices are allowed to rise mid contract or why they all added an extra 3.9% increase over inflation - https://www.theguardian.com/busines...lecoms-firms-imposing-inflation-busting-bills

Only country in the entire world with privatised water (England that is, Scotland and Wales aren't)

 

[scaramanga]

It is "happening" all the time as companies adjust their pricing and deal with the new setup, or withdraw or move. It is not a big bang, but a gradual adjustment/realignment. Some EU companies just wound down their exports to the UK altogether. Others had contracts to service and then adjusted pricing etc etc etc.

FWIW London School of Economics puts the % of food inflation caused by Brexit, a lot higher than our conservative guesses, at one third. https://www.bloomberg.com/news/arti...food-price-inflation-lse-paper-says#xj4y7vzkg

That would suggest that we're doing significantly better than most countries in terms of food inflation without the Brexit effect. I find that incredibly hard to believe.

Why would companies stop exporting to the UK? There's no incentive to do that. Unless we're cheaper in the UK after the addition of negligible transport costs (we're not) then they would continue.

 

[ricky2tricky4city]

.

Looks like Thames Water about to go bankrupt, new CEO is ex head of OFWAT as well - you couldn't make it up.

The regulatory bodies might as well not exist, I read only yesterday that the one overseeing broadband/phones haven't even bothered to investigate why prices are allowed to rise mid contract or why they all added an extra 3.9% increase over inflation - https://www.theguardian.com/busines...lecoms-firms-imposing-inflation-busting-bills

A real sign of the times and a perfect brick storm (literally) for the health of our rivers and seas.

So just as a major investment is needed in waste water infrastructure, these utility companies are crying broke despite dividends being paid a plenty during the 'good' years.

Utilities are the most boring, uncomplicated companies BUT yep, they're still leaveraged and have a debt pile...which all unravels as soon as interest rates rise. A bad sign for the corporate economy, me thinks.

 

[SpurMeUp]

That would suggest that we're doing significantly better than most countries in terms of food inflation without the Brexit effect. I find that incredibly hard to believe.

Why would companies stop exporting to the UK? There's no incentive to do that. Unless we're cheaper in the UK after the addition of negligible transport costs (we're not) then they would continue.

25% lower imports according to this https://blogs.lse.ac.uk/businessrev...fter-the-uk-eu-agreement-took-effect-in-2021/

OBR found the same https://obr.uk/box/the-latest-evidence-on-the-impact-of-brexit-on-uk-trade/

And less exports to the Eu

https://www.bloomberg.com/news/arti...p-on-exports-due-to-brexit-red-tape#xj4y7vzkg

 

[scaramanga]

25% lower imports according to this https://blogs.lse.ac.uk/businessrev...fter-the-uk-eu-agreement-took-effect-in-2021/

OBR found the same https://obr.uk/box/the-latest-evidence-on-the-impact-of-brexit-on-uk-trade/

And less exports to the Eu

https://www.bloomberg.com/news/arti...p-on-exports-due-to-brexit-red-tape#xj4y7vzkg

The numbers have reduced, but that's because we fudged our economy by shutting everything when some people got a cold. In proportion to GDP it's has little to no effect at all:

 

[Crab.C.Nesbitt]

That would suggest that we're doing significantly better than most countries in terms of food inflation without the Brexit effect. I find that incredibly hard to believe.

Why would companies stop exporting to the UK? There's no incentive to do that. Unless we're cheaper in the UK after the addition of negligible transport costs (we're not) then they would continue.

Brexit has made it much more expensive to both import and export goods because of the additional checks that have had to be put in place as a result of leaving the single market.

 

[scaramanga]

Brexit has made it much more expensive to both import and export goods because of the additional checks that have had to be put in place as a result of leaving the single market.

Assuming you're correct and that it's a significant difference (you're not and it's not, but let's go with it) then that inflation happened years ago. Inflation is a measure against this time last year - the inflation rate would have fallen through the floor one year and a day after Brexit.

 

[LutonSpurs]

The numbers have reduced, but that's because we fudged our economy by shutting everything when some people got a cold. In proportion to GDP it's has little to no effect at all:

View attachment 15678

LOL it was lockdowns and not Brexit. Economics from Scara is not the way to learn kids. He talks gonads. Both factors mattered. One was a deadly virus. The other one was a decision Scara and others made and they can't admit they effed it

 

[ricky2tricky4city]

That would suggest that we're doing significantly better than most countries in terms of food inflation without the Brexit effect. I find that incredibly hard to believe.

Why would companies stop exporting to the UK? There's no incentive to do that. Unless we're cheaper in the UK after the addition of negligible transport costs (we're not) then they would continue.

Because of multi load lorries. Food is perishable. The GVMS requires separate paperwork for all customers/suppliers you have onboard. One fails, or is incorrect, you're going nowhere. All freight onboard suffers. That risk is not palatable to many food businesses (ie both ways import and export).
They find alternative markets (they have the whole of Europe) or grow less.

This can in turn drives prices as freight costs go up and growers chase to cover their losses, or demand outstrips supply.
We have seen how flaky the supply chain is on supermarket shelves.

 

[scaramanga]

LOL it was lockdowns and not Brexit. Economics from Scara is not the way to learn kids. He talks gonad*s. Both factors mattered. One was a deadly virus. The other one was a decision Scara and others made and they can't admit they effed it

If you have an alternative explanation for the ONS figures I'd be glad to hear it.

 

[scaramanga]

Because of multi load lorries. Food is perishable. The GVMS requires separate paperwork for all customers/suppliers you have onboard. One fails, or is incorrect, you're going nowhere. All freight onboard suffers. That risk is not palatable to many food businesses (ie both ways import and export).
They find alternative markets (they have the whole of Europe) or grow less.

This can in turn drives prices as freight costs go up and growers chase to cover their losses, or demand outstrips supply.
We have seen how flaky the supply chain is on supermarket shelves.

Hauliers struggled at first - mainly due to the EU intentionally making life more difficult than any other country does. It's really not difficult trading in and out of the EU, we do it all the time.

It was a pain in the arse at first, but certainly not enough for us to just turn down business. Fairly soon it will be like trading everywhere else - you tell the haulier what you're shipping, they sort it all out for a very small fee.

 

[SpurMeUp]

Hauliers struggled at first - mainly due to the EU intentionally making life more difficult than any other country does. It's really not difficult trading in and out of the EU, we do it all the time.

It was a pain in the arse at first, but certainly not enough for us to just turn down business. Fairly soon it will be like trading everywhere else - you tell the haulier what you're shipping, they sort it all out for a very small fee.

No massive difference granted, apart from fresh perishable stuff where it is a significant pain as delays that come from greater complexity/red tape really count. But even you are probably incurring a small increase in cost as you pay the haulier to complete this new paperwork that they did not have to complete before. Okay, so a small downgrade to free trade. All the expense of setting up new systems and checks, but at the end of it, no massive change. A slight downgrade to freedom.

But what are the upsides? You were explaining why you liked Brexit because it would free the UK to change laws on chemicals that you could use in manufacturing. Has that transpired?

 

[scaramanga]

No massive difference granted, apart from fresh perishable stuff where it is a significant pain as delays that come from greater complexity/red tape really count. But even you are probably incurring a small increase in cost as you pay the haulier to complete this new paperwork that they did not have to complete before. Okay, so a small downgrade to gree trade. All the expensive of setting up new systems and checks, but at the end of it, no massive change. A slight downgrade to freedom though.

But what are the upsides? You were explaining why you liked Brexit because it would free the UK to change laws on chemicals that you could use in manufacturing. Has that transpired?

The "sunset date" as they insist on calling it has been pushed again, so that's good. Who knows what will happen long term. People are working hard and speaking in the right ears but it probably depends on which flavour of govt we end up with.

We don't have a govt capable of taking real advantage right now, but one that genuinely believed in incentivising with low tax could have a field day.

 

[SpurMeUp]

The "sunset date" as they insist on calling it has been pushed again, so that's good. Who knows what will happen long term. People are working hard and speaking in the right ears but it probably depends on which flavour of govt we end up with.

We don't have a govt capable of taking real advantage right now, but one that genuinely believed in incentivising with low tax could have a field day.

With a 20b a month government deficit, and huge borrowing, I can't see lower taxes, maybe the opposite. In fact we have already seen various tax increases post Brexit.

The theory and the reality are not matching. You're still living in a fantasy. Brexit has meant higher not lower taxes, and with less tax revenue with less exports, some financial jobs going abroad and a smaller economy (as predicted by the government) you can't square the circle. To maintain our national services, with less tax revenue coming in, we have to pay more - not less - tax.

So in short, you are deluded trying to argue that Brexit has not affected inflation, despite increased trade costs and recruitment costs, and by your own account you've seen no Brexit benefit. Instead, you're drawn quoting the latest Brexit fantasy a "sunshine date". Can you see why people might think you're a smidgen deluded?