Macroeconomics: UK economy, IB Economics
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Macroeconomics: UK economy, IB Economics
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A brief overview of relevant articles for IB and A-Level all relating to the UK economy
Curated by Graham Watson
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UK food price inflation slows to 4.5% but many still struggling | Supermarkets | The Guardian

UK food price inflation slows to 4.5% but many still struggling | Supermarkets | The Guardian | Macroeconomics: UK economy, IB Economics | Scoop.it
From www.theguardian.com - March 26, 6:24 AM
Waitrose and Ocado win new shoppers while a quarter of households are feeling the squeeze
Graham Watson's insight:

Another good sign, with food price inflation slowing to 4.5%, and some interesting numbers from the supermarket sector, with Lidl still the fastest growing supermarket, emphasising how the discounters are doing well at a time of economic uncertainty. 

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Shop price inflation easing, say top UK retailers before key meeting with MPs | Inflation | The Guardian

Shop price inflation easing, say top UK retailers before key meeting with MPs | Inflation | The Guardian | Macroeconomics: UK economy, IB Economics | Scoop.it
From www.theguardian.com - June 27, 2023 3:28 AM
British Retail Consortium says figure eased to 8.4% in June from 9% in May
Graham Watson's insight:

More on the story 'du jour' with the news that food price inflation has started to fall, according to the British Retail Consortium. This comes against a background of the sector being investigated both by Parliament and the Competition and Markets Authority. 

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Why it’s not quite back to the 70s with talk of food price controls | Inflation | The Guardian

Why it’s not quite back to the 70s with talk of food price controls | Inflation | The Guardian | Macroeconomics: UK economy, IB Economics | Scoop.it
From www.theguardian.com - May 31, 2023 11:01 AM
Statutory caps were brought in under Heath, this time the government wants a voluntary store scheme to meet Sunak’s pledge to halve inflation
Graham Watson's insight:

Larry Elliott seeks to draw out both the similarities and the differences between the price controls of the Heath government in the 1970s, and the attempt by the Sunak government to encourage supermarkets to reach a voluntary agreement to do the same in the present climate. 

 

Of course, a voluntary rather than statutory cap is clearly very different but many of the same problems still remain, not least the distortionary effect on the allocation of resources and the associated welfare loss. 

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The ‘coronation effect’: high street shelves being cleared of quiche and fizz | Retail industry | The Guardian

The ‘coronation effect’: high street shelves being cleared of quiche and fizz | Retail industry | The Guardian | Macroeconomics: UK economy, IB Economics | Scoop.it
From www.theguardian.com - May 4, 2023 10:16 AM
Fizz, quiche and bunting flying off shelves, with Britons forecast to spend £200m on weekend festivities
Graham Watson's insight:

Retailers are reporting an increase in sales as people look to stock up on party foods, such as coronation quiche and champagne. The estimated effect is likely to be around £200m, with discounters and the luxury end of the market noting higher sales. 

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UK supermarket price inflation hits record high, adding £788 to annual bills | Supermarkets | The Guardian

UK supermarket price inflation hits record high, adding £788 to annual bills | Supermarkets | The Guardian | Macroeconomics: UK economy, IB Economics | Scoop.it
From www.theguardian.com - January 31, 2023 9:02 AM
Milk, eggs and dog food among grocery items whose prices rose fastest
Graham Watson's insight:

Food price inflation revealed in this Guardian piece looking at how the price of grocery items has risen by nearly £800 this year. Milk, eggs and pet food saw the highest increases but the latest Kantar data also reflects seasonal factors such as dry January and Veganuary too!

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Greggs workers get 10% pay increase amid ‘material cost inflation’ | Greggs | The Guardian

Greggs workers get 10% pay increase amid ‘material cost inflation’ | Greggs | The Guardian | Macroeconomics: UK economy, IB Economics | Scoop.it
From www.theguardian.com - January 5, 2023 4:13 PM
Bakery chain to pay shop staff at least £10.60 an hour after price of sausage rolls went up to £1.20
Graham Watson's insight:

Another high street retailer has increased its pay, following recent supermarket pay increases. In this case, it's Greggs who have reacted to the possibility of its staff being tempted away by higher salaries elsewhere by raising salaries by 10% to £10.60 per hour. 

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UK shoppers switch to budget ranges as grocery price inflation hits record high | Supermarkets | The Guardian

UK shoppers switch to budget ranges as grocery price inflation hits record high | Supermarkets | The Guardian | Macroeconomics: UK economy, IB Economics | Scoop.it
From www.theguardian.com - November 8, 2022 4:31 PM
Discounters Aldi and Lidl benefit as figures reveal annual cost of grocery shop has soared by £682
Graham Watson's insight:

The latest Kantar market research has indicated two things - the significant level of food price inflation which has reached 14.7%, meaning that the annual cost of shopping has risen by £682 in the course of a year. 

 

As a result, you'll be unsurprised to learn that shoppers have started to look for greater value for money, such that "sales of the very cheapest supermarket own-label ranges have risen 42%" and sales in Aldi and Lidl also rising dramatically.  

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‘It’s ridiculous’: shock as some UK grocery prices rise by more than 20% | Inflation | The Guardian

‘It’s ridiculous’: shock as some UK grocery prices rise by more than 20% | Inflation | The Guardian | Macroeconomics: UK economy, IB Economics | Scoop.it
From www.theguardian.com - May 21, 2022 2:22 AM
Which? analysis finds cereal, mushrooms and cheese among the items to have risen the most
Graham Watson's insight:

Evidence, both of inflation and shrinkflation is emerging from UK supermarkets, with staple foodstuffs rising by up to 20%, notably for cereals, cheese and mushrooms.

 

And when prices aren't rising retailers are often shrinking the portion size to control their costs.

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Inflation measure shake-up amid Jack Monroe row

Inflation measure shake-up amid Jack Monroe row | Macroeconomics: UK economy, IB Economics | Scoop.it
From www.bbc.co.uk - January 26, 2022 9:18 AM
The food poverty campaigner is claiming victory after statistics chiefs pledged to revise their methods.
Graham Watson's insight:

It's interesting to see that the ONS has responded to the criticism that current measures of inflation aren't representative by blogging and saying that it is looking at broadening measures of inflation to include many more data points - using supermarket checkout data - and thus hopefully capturing more of the price changes in food. At the moment, the current measure seems to discriminate against the lowest income consumers. 

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Tesco and Iceland bosses warn over Christmas supplies

Tesco and Iceland bosses warn over Christmas supplies | Macroeconomics: UK economy, IB Economics | Scoop.it
From www.bbc.co.uk - August 26, 2021 4:19 AM

But Tesco's chairman says don't "overdramatise" lorry driver crisis, as Iceland warns problem getting worse.

Graham Watson's insight:

I'll just leave this here - I'm not going to comment...

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Retail prices set to rise this autumn, says BRC

Retail prices set to rise this autumn, says BRC | Macroeconomics: UK economy, IB Economics | Scoop.it
From www.bbc.co.uk - June 2, 2021 2:03 AM
Consumers face rising bills in the autumn as costs climb and Brexit red tape increases
Graham Watson's insight:

The British Retail Consortium are predicting price rises this autumn as a number of factors feed into rising prices for consumers, notably higher food prices, rising shipping costs and the continued effects of Brexit. They also argue that at the moment, high levels of competition between supermarkets is helping keep prices low. 

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Big UK retailers record sharpest growth in sales since 2018, CBI figures show | Consumer spending | The Guardian

Big UK retailers record sharpest growth in sales since 2018, CBI figures show | Consumer spending | The Guardian | Macroeconomics: UK economy, IB Economics | Scoop.it
From www.theguardian.com - April 27, 2021 5:06 PM
Strong sales in furniture and DIY as lockdown eases but clothing, footwear and department stores still struggle
Graham Watson's insight:

Retailers have seen the fastest growth in sales since 2018, according to the CBI, although, of course, this disguises sectoral differences. However, the overall pattern is positive, with hardware stores, DIY shops and furniture stores seeing the greatest benefit. 

 

Equally, in the supermarket sector, discounter Aldi saw its market share grow for the first time in a year, and Asda became the fastest growing supermarket, indicating a return to shopping in physical stores. 

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Covid lockdown in UK prompts sales surge at Lidl and Just Eat | Business | The Guardian

Covid lockdown in UK prompts sales surge at Lidl and Just Eat | Business | The Guardian | Macroeconomics: UK economy, IB Economics | Scoop.it
From www.theguardian.com - January 13, 2021 1:37 PM
Restaurant and pub closures fuel trading boom over Christmas period
Graham Watson's insight:

An interesting look at how coronavirus has altered shopping habits - with discounter, Lidl, and delivery firm, Just Eat, seeing sales surge over Christmas.

 

Even pre-lockdown, both had been doing well, but perhaps the pandemic has accelerated this - with Lidl gaining market share at others' expense, and interestingly its Deluxe range also selling exceptionally well.

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February dip sends UK food price inflation to nearly two-year low | Retail industry | The Guardian

February dip sends UK food price inflation to nearly two-year low | Retail industry | The Guardian | Macroeconomics: UK economy, IB Economics | Scoop.it
From www.theguardian.com - February 27, 2:19 AM
Shoppers helped by falling energy costs and supermarket competition as meat, fish and fruit prices drop
Graham Watson's insight:

The latest data from the British Retail Consortium has highlighted the fact that competition between supermarkets has driven food price inflation down to its lowest level for nearly two years, potentially helping inflation fall. 

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Supermarkets to be quizzed over rising food costs | UK cost of living crisis | The Guardian

Supermarkets to be quizzed over rising food costs | UK cost of living crisis | The Guardian | Macroeconomics: UK economy, IB Economics | Scoop.it
From www.theguardian.com - June 25, 2023 11:04 AM
Four of the UK’s major food retailers will answer questions from MPs over the spiralling cost of groceries this week
Graham Watson's insight:

MPs are going to quiz some of the UK's major retailers about the extent to which they've exploited the cost of living crisis to raise prices and exploit consumers. Of course, they are going to deny this, but it's interesting to see politicians taking this line of attack. 

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Bunting, biscuits, beer - Brits spend on Coronation

Bunting, biscuits, beer - Brits spend on Coronation | Macroeconomics: UK economy, IB Economics | Scoop.it
From www.bbc.co.uk - May 6, 2023 4:33 AM
The public is on course to shell out £200m on food and drink this weekend, one retail body predicts.
Graham Watson's insight:

Jingoism and economics: this article looks at how the coronation has increased retail sales on food and drink. God Save the King!

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Food prices jump despite drop in wholesale costs

Food prices jump despite drop in wholesale costs | Macroeconomics: UK economy, IB Economics | Scoop.it
From www.bbc.co.uk - May 2, 2023 3:25 AM
The body which represents UK supermarkets says the cost of a food shop should ease in the coming months.
Graham Watson's insight:

An interesting aside from the UK grocery market, with the  British Retail Consortium (BRC) noting that food prices are still rising, although wholesale prices have started to fall. 

 

According to the article, "Food inflation jumped to 15.7% last month compared with April in 2022, up from 15% in March" but with the caveat that prices should start to fall soon, although thankfully without a statement about things passing through the supply chain. 

 

Nevertheless, a 15% rise is significant, and it is difficult to see how this is going to come down to low single digits in the next few months, meaning a sustained cost of living crisis. 

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Cost of supermarket budget brands rose 20.3% in December, survey finds | Inflation | The Guardian

Cost of supermarket budget brands rose 20.3% in December, survey finds | Inflation | The Guardian | Macroeconomics: UK economy, IB Economics | Scoop.it
From www.theguardian.com - January 18, 2023 4:39 AM
Huge rise in cost of own-label ranges outstripped 12.6% increase in supermarkets’ luxury brands
Graham Watson's insight:

A nice little aside, once again highlighting the uneven distributional effects of inflation: price rises for supermarket own brand items is currently outstripping the rate of price increases for their luxury brands. Food for thought, as it were. 

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sheronlu's curator insight, January 27, 2023 6:36 PM

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Rising cost of basic food items leaving poorest people worst off, UK study finds | Inflation | The Guardian

Rising cost of basic food items leaving poorest people worst off, UK study finds | Inflation | The Guardian | Macroeconomics: UK economy, IB Economics | Scoop.it
From www.theguardian.com - December 23, 2022 5:30 AM
As staple food inflation runs above 16%, many say they have skipped or reduced the size of a meal
Graham Watson's insight:

A constant theme of the past few months has been the fact that the distributional effects of inflation are not evenly distributed, and instead fall most severely on the poor. This article details how staple food prices have risen more than other food prices, and some have suggested that supermarkets have been exploiting this. 

 

Either way, empirical evidence over the past year shows that the poor are experiencing a higher rate of inflation than the rest of us. 

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Food bills are set to soar by £380 this year

Food bills are set to soar by £380 this year | Macroeconomics: UK economy, IB Economics | Scoop.it
From www.bbc.co.uk - June 21, 2022 9:31 AM
As grocery prices rise at their highest pace in 13 years, experts warn there are more hikes to come.
Graham Watson's insight:

Kantar reporting the extent to which food price inflation is rising - with food bills set to become £32 per month more expensive in 2022. As a result of the cost of living crisis, consumers are swapping to supermarket own brand goods, and discounters, like Aldi and Lidl, are gaining market share at the expense of other supermarkets 

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The post-Brexit economic crisis never materialised – Labour is right to move on | Larry Elliott | The Guardian

The post-Brexit economic crisis never materialised – Labour is right to move on | Larry Elliott | The Guardian | Macroeconomics: UK economy, IB Economics | Scoop.it
From www.theguardian.com - January 31, 2022 6:03 PM
The unpopular truth is that leaving the EU has not magically transformed Britain, but nor has it been calamitous, says Larry Elliott, the Guardian’s economics editor
Graham Watson's insight:

This is an interesting article, in that Larry Elliott, the Guardian's Economics Editor, argues that Labour are right not to focus on Brexit - simply because Brexit hasn't proved catastrophic for the UK economy. 

 

It's fascinating to me, because I question how 'disastrous' something needs to be for it to be worthy of concern. I think Brexit has been disastrous: supermarkets are regularly lacking stock, prices have risen consumer choice has declined. And I can't see any gains.

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UK supermarket prices ‘to rise by 5%’ as supply chain costs increase | Supply chain crisis | The Guardian

UK supermarket prices ‘to rise by 5%’ as supply chain costs increase | Supply chain crisis | The Guardian | Macroeconomics: UK economy, IB Economics | Scoop.it
From www.theguardian.com - September 24, 2021 12:14 PM
CO2 problem not yet taken into account, so there could be a second wave of rises in new year
Graham Watson's insight:

And just when it couldn't get any better for the government, evidence from the supply chain suggests that the shortage of CO2 hasn't yet fed through into supermarket prices, and so the prospect of a 5% increase in the near term, followed by a second wave of price increase in the new year, doesn't look good for short-term inflationary prospects.

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divine's curator insight, December 20, 2021 6:31 AM

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Pay rise for Aldi lorry drivers amid shortage

Pay rise for Aldi lorry drivers amid shortage | Macroeconomics: UK economy, IB Economics | Scoop.it
From www.bbc.co.uk - August 2, 2021 4:44 AM

The supermarket is the latest to offer incentives for drivers after disruption to supply chains.

Graham Watson's insight:

More lovely basic economics, showing how markets react to changing market conditions. In this case, a shortage of HGV drivers has seen supermarkets raise wages to attract more workers into the profession. 

 

Of course, factor in Brexit, and the pandemic and it might, in the long term, require more than a £1,000 bonus - which, if I were a lorry driver, I'd find insulting in the light of the extent of executive bonuses - to attract and retain workers. 

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UK shoppers return to supermarkets as online spending slows | Supermarkets | The Guardian

UK shoppers return to supermarkets as online spending slows | Supermarkets | The Guardian | Macroeconomics: UK economy, IB Economics | Scoop.it
From www.theguardian.com - May 25, 2021 3:41 PM
Britons buying fewer take-home meals as Covid lockdown eases, says Kantar
Graham Watson's insight:

Kantar's latest grocery retail data has seen consumer behaviour revert to closer to normal and a move in favour of beauty products and shoe polish, and a slight fall in online retail. 

 

Additionally, the discounters saw an increase in market share with the Co-op and Iceland losing out. 

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Tesco: Brexit disruption 'is a challenge not a crisis'

Tesco: Brexit disruption 'is a challenge not a crisis' | Macroeconomics: UK economy, IB Economics | Scoop.it
From www.bbc.co.uk - January 14, 2021 12:26 PM
New Brexit trade rules mean Britain's biggest supermarket faces problems importing some fruit, meat and ready meals.
Graham Watson's insight:

It seems that Tesco is very much glass half-full - viewing the current dislocation of its supply chains as more of a drama, and less of a crisis - to reference an old insurance advert. 

 

But is this true. Its' inevitably going to be the case that the UK's new trade arrangements are going to take some time to bed in, but for every day that there's disruption, it's  another reminder of the costs of Brexit. I've yet to spot any compensating benefits. 

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