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You can find the current article at its original source at https://www.theguardian.com/business/live/2019/dec/18/brexit-cliff-edge-markets-pound-inflation-food-petrol-business-live
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| UK inflation at three-year low despite rising chocolate prices - business live | UK inflation at three-year low despite rising chocolate prices - business live |
| (about 1 hour later) | |
| Rolling coverage of the latest economic and financial news | Rolling coverage of the latest economic and financial news |
| Professor Costas Milas of Liverpool University argues that UK interest rates are likely to be cut next year - whether Brexit goes smoothly or not. | |
| He writes: | |
| But what if the trade deal negotiations hit hurdles? | |
| As a knowledgable and well-read lot, I’m sure you’ll have NO TROUBLE at all tackling our Christmas quiz. | As a knowledgable and well-read lot, I’m sure you’ll have NO TROUBLE at all tackling our Christmas quiz. |
| It’s just been published, covering some of the biggest business news stories of the year: | It’s just been published, covering some of the biggest business news stories of the year: |
| Inflation is rising particularly briskly in the North of England, according to think tank NIESR. | Inflation is rising particularly briskly in the North of England, according to think tank NIESR. |
| NIESR (the National Institute of Economic and Social Research) has calculated that ‘underlying inflation’ rose by 1% across the UK (this measure excludes ‘extreme price movements’). | NIESR (the National Institute of Economic and Social Research) has calculated that ‘underlying inflation’ rose by 1% across the UK (this measure excludes ‘extreme price movements’). |
| But while this underlying inflation rose by 1.5% in the North, it only picked up by 0.7% in the South East, and by 0.9% in Scotland. That’s based on 130,088 “locally collected” prices. | But while this underlying inflation rose by 1.5% in the North, it only picked up by 0.7% in the South East, and by 0.9% in Scotland. That’s based on 130,088 “locally collected” prices. |
| NIESR economist Janine Boshoff said: | NIESR economist Janine Boshoff said: |
| A quick dig into November’s inflation report shows that the price of some types of food have risen sharply. | A quick dig into November’s inflation report shows that the price of some types of food have risen sharply. |
| Chocolate, for example, is 4.3% more expensive than a year ago. | Chocolate, for example, is 4.3% more expensive than a year ago. |
| Ice-creams and ‘edible ices’ cost a chunky 6.1% more (which is intriguing, as November isn’t really peak season). | Ice-creams and ‘edible ices’ cost a chunky 6.1% more (which is intriguing, as November isn’t really peak season). |
| Yoghurt is up 12.5%, margarine by 15.9%, while pasta and couscous is 17.7% more expensive than November 2018. | Yoghurt is up 12.5%, margarine by 15.9%, while pasta and couscous is 17.7% more expensive than November 2018. |
| In the drinks section, cocoa and powdered chocolate was 7.7% more expensive than a year ago, while fruit and vegetable juices were 8.9% pricier. | In the drinks section, cocoa and powdered chocolate was 7.7% more expensive than a year ago, while fruit and vegetable juices were 8.9% pricier. |
| Here’s a sector-by-sector breakdown of the November inflation report: | Here’s a sector-by-sector breakdown of the November inflation report: |
| OVERALL CONSUMER PRICES: 1.5% over the last year | OVERALL CONSUMER PRICES: 1.5% over the last year |
| Food and non-alcoholic beverages: 2.1% | Food and non-alcoholic beverages: 2.1% |
| Alcoholic beverages and tobacco: 1.9% | Alcoholic beverages and tobacco: 1.9% |
| Clothing and footwear: unchanged | Clothing and footwear: unchanged |
| Housing, water, electricity, gas and other fuels: 1.2% | Housing, water, electricity, gas and other fuels: 1.2% |
| Furniture, household equipment and maintenance: 1.2% | Furniture, household equipment and maintenance: 1.2% |
| Health: 2.9% | Health: 2.9% |
| Transport: 0.8% | Transport: 0.8% |
| Communication: 3.3% | Communication: 3.3% |
| Recreation and culture: 1.5% | Recreation and culture: 1.5% |
| Education: 2.7% | Education: 2.7% |
| Restaurants and hotels: 2.4% | Restaurants and hotels: 2.4% |
| Miscellaneous goods and services: 1.9% | Miscellaneous goods and services: 1.9% |
| Economists agree that Britain’s low inflation means there’s no chance that the Bank of England will raise interest rates soon. | Economists agree that Britain’s low inflation means there’s no chance that the Bank of England will raise interest rates soon. |
| The BoE sets rates tomorrow, at its last meeting of 2019, but Jing Teow, economist at PwC, doesn’t expect fireworks: | The BoE sets rates tomorrow, at its last meeting of 2019, but Jing Teow, economist at PwC, doesn’t expect fireworks: |
| Yael Selfin, chief economist at KPMG UK, predicts that inflation will stay low next year - potentially allowing the BoE to cut borrowing costs. | Yael Selfin, chief economist at KPMG UK, predicts that inflation will stay low next year - potentially allowing the BoE to cut borrowing costs. |
| Chancellor Sajid Javid has welcomed today’s inflation figures, saying it will help families handle the cost of Christmas. | Chancellor Sajid Javid has welcomed today’s inflation figures, saying it will help families handle the cost of Christmas. |
| However, prices are still rising -- so households will suffer if their income hasn’t kept pace with inflation. | However, prices are still rising -- so households will suffer if their income hasn’t kept pace with inflation. |
| Wages are still rising faster than inflation in the UK, but the gap has narrowed. | Wages are still rising faster than inflation in the UK, but the gap has narrowed. |
| Yesterday we learned that total pay growth (including bonuses) slowed to 3.2%, from 3.6%, with basic pay growth dipping from 3.6% to 3.5%. | Yesterday we learned that total pay growth (including bonuses) slowed to 3.2%, from 3.6%, with basic pay growth dipping from 3.6% to 3.5%. |
| Chocolate prices are a classic example of ‘shrinkflation’, especially at Christmas time. | Chocolate prices are a classic example of ‘shrinkflation’, especially at Christmas time. |
| Last week, ITV News showed how some favourite festive confectionary tins, such as Roses and Quality Street, have shrunk by 40% in the last decade. That has allowed them to keep the sticker price low - but obviously consumers are getting less for their money. | Last week, ITV News showed how some favourite festive confectionary tins, such as Roses and Quality Street, have shrunk by 40% in the last decade. That has allowed them to keep the sticker price low - but obviously consumers are getting less for their money. |
| The Office for National Statistics tries to keep a close eye on this. Earlier this year, it reported that 206 products shrank in size in 2018, while 79 got bigger. | The Office for National Statistics tries to keep a close eye on this. Earlier this year, it reported that 206 products shrank in size in 2018, while 79 got bigger. |
| So if a chocolate tub gets significantly smaller, but its price doesn’t, that pushes inflation up. | So if a chocolate tub gets significantly smaller, but its price doesn’t, that pushes inflation up. |
| UK house price growth has hit its lowest level in seven years, as prices continue to fall in London. | UK house price growth has hit its lowest level in seven years, as prices continue to fall in London. |
| Across the country, the average house price increased by 0.7% in the 12 months to October to £233,000. That’s the lowest growth since September 2012. | Across the country, the average house price increased by 0.7% in the 12 months to October to £233,000. That’s the lowest growth since September 2012. |
| Prices rose strongly in Yorkshire and the Humber (+3.2%) but fell in the capital (-1.6%) and the North East (-1%). | Prices rose strongly in Yorkshire and the Humber (+3.2%) but fell in the capital (-1.6%) and the North East (-1%). |
| On a regional basis, English house prices lagged behind the rest of the UK. | On a regional basis, English house prices lagged behind the rest of the UK. |
| England: +0.5% year-on-year | England: +0.5% year-on-year |
| Scotland: 1.4% | Scotland: 1.4% |
| Wales: 3.3% | Wales: 3.3% |
| Northern Ireland: 4.0% | Northern Ireland: 4.0% |
| ONS Head of Inflation Mike Hardie points out that concert tickets, and package holidays, also became pricier last month: | ONS Head of Inflation Mike Hardie points out that concert tickets, and package holidays, also became pricier last month: |
| Food prices rose in November, particularly for chocolate, according to today’s inflation report. | Food prices rose in November, particularly for chocolate, according to today’s inflation report. |
| The Office for National Statistics explains: | The Office for National Statistics explains: |
| Recreation and culture costs rose at a faster rate last month, but that was balanced by smaller rises in hotel bills and tobacco prices. | Recreation and culture costs rose at a faster rate last month, but that was balanced by smaller rises in hotel bills and tobacco prices. |
| Women’s clothes price inflation also slower, the ONS says: | Women’s clothes price inflation also slower, the ONS says: |
| Britain’s inflation rate remains at its lowest since November 2016, as this chart shows: | Britain’s inflation rate remains at its lowest since November 2016, as this chart shows: |
| Just in: UK inflation stuck at a three-year low of 1.5% last month. | Just in: UK inflation stuck at a three-year low of 1.5% last month. |
| That’s a little higher than expected, but still comfortably below the Bank of England’s target of 2%. | That’s a little higher than expected, but still comfortably below the Bank of England’s target of 2%. |
| More to follow.... | More to follow.... |
| Big news in the auto sector: Peugeot and Fiat Chrysler have agreed to merge, creating the world’s four-biggest carmaker. | Big news in the auto sector: Peugeot and Fiat Chrysler have agreed to merge, creating the world’s four-biggest carmaker. |
| My colleague Jasper Jolly has the details: | My colleague Jasper Jolly has the details: |
| Newsflash: German business confidence has risen, as Europe’s largest economy continues to swerve a recession. | Newsflash: German business confidence has risen, as Europe’s largest economy continues to swerve a recession. |
| The IFO think tank has reported that Germany’s business leaders are more confident about future prospects, and that current economic conditions have brightened a little this month. | The IFO think tank has reported that Germany’s business leaders are more confident about future prospects, and that current economic conditions have brightened a little this month. |
| IFO estimates that the German economy may grow by 0.2% in the current quarter, as firms enter 2020 with “more confidence’. | IFO estimates that the German economy may grow by 0.2% in the current quarter, as firms enter 2020 with “more confidence’. |
| Here’s the details: | Here’s the details: |
| Business climate index: UP to 96.3 in December, from 95.1 | Business climate index: UP to 96.3 in December, from 95.1 |
| Current conditions: UP to 98.8, from 98 | Current conditions: UP to 98.8, from 98 |
| Business expectations: UP to 93.8 from 92.3 | Business expectations: UP to 93.8 from 92.3 |