Measuring changing shopping habits and inflation

As students learn about the impact of external economic influences such as inflation, it might be helpful to look at the changes the Office of National Statistics have just made to the way in which they calculate the average level of inflation for the UK. Each year they review the so-called ‘typical basket of goods’ that is bought by households, so that they can measure changes in the price of those goods over the coming year. This enables them to make sure that the prices they are monitoring are for the goods which are most relevant to the average household in the UK – the aim is to update the basket to reflect changes in our pattern of spending.

Recession Tracker for UK Economic Data

As students entering AQA BUSS 4 start on their research into the Recent UK Recession, they may like to use this BBC Recession Tracker to get to grips with the latest data on GDP, inflation, interest rates, jobs and house prices. It is updated every time a new piece of data is released and has links to useful related articles like ‘GDP Explained’ and ‘Understanding Inflation’.

Introducing business and the economic environment with Darling’s debt dilemma

I really like this cartoon version of the impossible task facing the Chancellor as he prepares his budget. How to solve the riddle of balancing out the need for spending with the need to raise revenue in order to repay the borrowing - which could be seen as a mega-version of how to cope with cash flow problems. This animated cartoon, which runs through the figures and the options, would be a good introduction to the issues and could start off a discussion about the impacts on businesses and their customers over the next few years. The BBC’s Recession Tracker gives up-to-date figures for all the key indicators of inflation, unemployment, gdp growth and so on, providing good back up, and the ‘UK Economy’ page has good coverage and comment on the latest developments. 

Revision Quiz - Inflation

Here is a revision quiz which tests business student understanding of inflation.

Launch interactive revision quiz on inflation

Download SCORM-VLE import file (zip)

Video report - pound hit by falling inflation

I am borrowing this idea from Amy Chapman on the GCSE Economics blog - it is a really useful and simple video of Stephanie Flanders’ report on the BBC news yesterday about the effect that falling inflation is having on exchange rates, and how that impacts on exporters as well as on those needing to buy other currencies which would make a great lesson starter or discussion piece on the risks of overseas marketing.

Revision Presentation - Inflation

Here is a new streamed revision presentation on inflation and the business environment.

The editable and VLE (SCORM-compliant) version of this presentation is available to buy as part of tutor2u’s AQA BUSS4 Teacher Presentation suite.

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Q&A - Outline the main costs and benefits of inflation

Inflation has many important costs and consequences for both society and business. However a stable and low level of inflation also provides some upsides for business.

Q&A - Explain the causes of inflation

There are two main causes of inflation:
• Demand-pull (when there is excess demand), and
• Cost-push (when costs rise)

Q&A - What is inflation and how is it measured?

Inflation is a sustained increase in the average price level of a country. The rate of inflation is measured by the annual percentage change in the level of prices.

Video case study - the effect of deflation on businesses

The latest data on inflation, as measured by the Retail Prices Index (RPI), sbows that prices are falling.  What are the effects on the turnover of retailers?  What is the impact on workers?  A great video from the BBC provides ideal stimulus material for looking at this topic. 

Working with suppliers - the grocery battle

The relative bargaining power of retailers and suppliers is sure to be tested during the recession, particularly in the highly competitive grocery supermarket sector wher consumers have demonstrated their preference for better value for money.

Economic environment - disposable income takes a dive

News of a really important economic development that business students will need to be able to understand.  Consumer disposable income is falling under pressure from rising prices of essential items such as food and energy whilst wage rises are not keeping pace…

Cash-strapped consumers flock to discounter Aldi

More evidence in a good piece in the Sunday Telegraph today that consumers are increasingly turning to the discount supermarket chains as their disposable income comes under pessure from rising household inflation and increasing unemployment…

Lots of hot air over gas and electricity price rises

The newspapers are full of analysis and response to the significant increase in consumer gas prices announced by yesterday, followed swiftly by news that British Gas owner Centrica has just made a half-year profit of almost £1 billion…

Scary Movie 5 - the UK Economy

In recent years, Business teachers have had a hard time trying to make the economics elements of the business curriculum interesting and relevant.  Not any more...its a horror show

Tanker driver strike - was it worthwhile after all?

Is it really two weeks since a strike by a group of oil tanker drivers had the media running their standard “panic buying” stories, featuring petrol stations that had run dry.  It’s amazing how the actions of a relatively small group of employees (providing fuel to just 10% of the UK’s petrol stations) can have such a significant impact.  However, it seems the strike tactic may have worked for the employees…

Mobeen - evaluating the Eurozone Economic forecasts

Over the last five years or so that I have been teaching Business and Economics, data for key economic performance indicators have been rather dull. Inflation, unemployment and interest rates have each been low and steady, and we have seen little of the ‘boom and bust’ cycle that appears in all the textbooks. It has been difficult to see any realistic economic forecasts actually making that much difference to businesses’ plans.

And so it is with the predictions for Eurozone (you did notice that they are for the Eurozone, didn’t you?) in the AQA Unit 2/3 case study on ‘Mobeen’ for Summer 2008. If these forecasts came to pass, none of them would have that great an influence on the plans for Mobeen.

However - there are a couple of evaluative points that spring to mind. If you actually look at what is going on currently with the UK Pound/Euro exchange rate and with inflation in the costs of meat and wheat, you will see that in reality, Mobeen could be facing some more challenging issues. Of course, the case study will have been written some months back, but you will do yourself no harm if you have a handle on what is really happening.

Two years of pain as CBI forecast lower growth for the UK

Business students don’t really need to know the detailed reasons why the rate of economic growth varies.  However, they should appreciate the longer-term trends in GDP growth rates and understand the main implications for businesses.

So today’s news from the Confederation of British Industry would make really useful reading for any students preparing for AS & A2 business exams in May & June 2008.  The outlook for economic growth in the UK economy is worsening according to their latest forecast.

More evidence of rising raw materials costs affecting profit margins

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A recurring theme of business news stories from the UK and abroad is the impact of rising raw material costs on the profitability of manufacturers.  There was another good example today when food supplier Uniq announced its latest results

Helping Business Students Understand Rising Inflation

A short two-minute news clip on consumer price inflation is a great way of updating our business students on the latest information on inflation.  I really liked this one from Sky News this week.

Supporters count the cost of following a Premiership footie club

How much would you spend to be a loyal supporter of Premiership football club? New research highlights just how much it all costs.