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In the News

Inflation has made us poorer but whose fault is it?

Graham Watson

1st May 2023

Larry Elliott writes in the Guardian about the current bout of inflation and, rightly in my view, turns the tables on the Bank of England. Instead of asking for workers to show restraint in their pay bargaining, he wonders about the extent to which the Bank has to accept the blame for inflation as a result of the conduct of monetary policy during the pandemic.

He suggests that the adoption of QE and the printing of money were inevitably going to stoke inflation at some point in time, and instead of concentrating its ire externally, there should be more soul searching closer to home.

Another inflationary supply shock appears to be on the way for the vegetable market: the combination of wet and cold weather in the UK, and unseasonable warm weather in Spain, is forecast to mean that there are going to be shortages of fruit and vegetables in future, and empty supermarket shelves as a result,

Two of the biggest companies in food manufacture and grocery retailing, Unilver and Sainsburys have come out and flatly denied price gouging. That said, I leave it to you to deconstruct the following statements: Unilever has said that they are not "profiteering in any form" from rising prices - which is quite a claim.

Equally, Sainsbury have said "they had spent millions on lowering prices and was 'determined to battle inflation'."

Graham Watson

Graham Watson has taught Economics for over twenty years. He contributes to tutor2u, reads voraciously and is interested in all aspects of Teaching and Learning.

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