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Julian Jessop Profile picture
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Dec 23 • 4 tweets • 3 min read
Since #food prices are in the news again, here are three charts comparing the UK and the rest of Europe.

(Spoiler alert: it's no consolation, but food price inflation is even higher in the EU than in #BrexitBritain)

1. What's happened to food prices (in levels) since 2016...
2. Cumulative #food price #inflation since December 2019...
3. The latest annual food price #inflation rates (for November)...
ps. you find the data yourself here 👇

(I've used 'food and non-alcoholic beverages', but the story is the same for just 'food') 🤓

For the UK...

ons.gov.uk/economy/inflat…

For the EU...

ec.europa.eu/eurostat/datab…

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More from @julianHjessop

Julian Jessop Profile picture
Dec 1
Four quick points on the latest stories about #Brexit's impact on UK #food price #inflation...

1. This is not news: the original research by the same authors was first published (by UKICE) back in April, and the Guardian etc even wrote it up at the time!

theguardian.com/politics/2022/…
2. These reports claim that new non-tariff barriers (NTBs) added 6% to UK #food prices in the two years to end 2021. But this number is based on hypothetical costs and modelling, not actual data on NTBs. (Recall that the UK has not imposed full checks on imports from the EU.)
3. It is still plausible that Brexit uncertainties and adjustments to UK-EU supply chains have added something to import costs and food prices.

Nonetheless, the 6% figure is really just sophisticated guesswork, especially given everything else going on over those two years.
Read 5 tweets
Julian Jessop Profile picture
Nov 15
Mixed bag of UK labour market data... (short 🧵)

#Unemployment rate down on the quarter but up on the month, and flattered by rise in number of people no longer actively looking for work (incl. long-term sick)

#Employment rate (first chart 👇) still below pre-Covid levels...
Earnings data a little better than expected: average total #pay (incl. bonuses) rose 6.0% in 3m to September and regular pay (excl. bonuses) by 5.7%, although still falling in real terms.

And early PAYE estimates for October point to a 6.0% increase in median pay last month...
Payroll #employment rose another 74,000 in October and remains on strong upward trend.

But separate Labour Force Survey suggests total employment (incl. self-employment) is much weaker.

Both measures have pros and cons - take your pick!
Read 4 tweets
Julian Jessop Profile picture
Oct 3
A bit of myth busting... the #BoE hasn't spent £65 billion to prop up the economy / bail out pension funds / save #KwasiKwarteng (or any variation)...

Instead, it has said it will buy gilts in 13 daily auctions, with a limit of £5bn each day.

Today it did just £22 *million*...
The aim of this policy is to cap gilt yields by signalling that the Bank will act as the buyer of last resort to prevent forced sales by pension funds from driving yields even higher.

If this signal is credible, the Bank will not actually have to buy anywhere near £65 billion.,,
The fact that it bought just £22 million today can also be seen as a sign that it is more comfortable with where yields are now. (Longer dated yields have fallen to around 4%.)

Note also that offers to sell today amounted to less than £2bn - a sign that the panic is easing.
Read 4 tweets
Julian Jessop Profile picture
Oct 2
A 🧵on #benefits…

#KwasiKwarteng’s reluctance to confirm that benefits will be uprated in line with #inflation has fed speculation that the government is considering a real-terms cut.

I’m going to explore this further, but at first sight it looks like a very bad idea...
To recap, benefits are usually uprated in April in line with the CPI measure of inflation recorded in the previous September. This meant that benefits rose by just 3.1% in April this year (the inflation rate in September 2021), well below actual inflation of 9.0% in April itself.
The row about this at the time was partly defused by additional one-off payments to low-income households.

But Ministers also argued that benefit claimants could expect to catch up next year when payments were uprated in line with the September CPI (probably about 10%).
Read 15 tweets
Julian Jessop Profile picture
Sep 28
Thoughts on the #BankofEngland intervention… 🧵

The Bank will carry out *temporary* purchases of long-dated UK government bonds from 28 Sep to 14 Oct to stabilise the market.

The purchases ‘will be carried out on whatever scale is necessary’, but are *strictly time-limited*…
At the same time, the #MPC is pausing the start of active #QT (i.e. selling bonds bought under #QE) until 31 Oct.

This might be reviewed depending on economic and market conditions, but the annual target of £80bn of sales is unchanged, so this is a delay rather than a U-turn...
In my view, this is a sensible and proportionate response.

Of course, it would be better if this hadn’t been necessary, but the aim was to lower gilt yields and the intervention has worked: 30-year yields have fallen by one full percentage point (!) today...
Read 8 tweets
Julian Jessop Profile picture
Sep 24
Reflections on the morning after - and especially the markets… 🧵

It may well take some time for the dust to settle on #KwasiKwarteng’s first #Budget (yes, 'Budget’: if it looks like a duck, walks like a duck and quacks like a duck, then it’s fair to call it a duck)...
The initial reaction from most economic commentators and in the financial markets has been a loud boo! There are some things I would have done differently. But the overall strategy is sound, and sentiment should recover as the economic benefits become clearer...
There are two aspects I particularly liked. One is the emphasis on breaking the ‘doom loop’ of weak economic growth and rising taxes, both with tax cuts and – at least as importantly – structural reforms on the supply-side...
Read 16 tweets

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