A lot does appear to be going wrong currently.
Admittedly nothing like a Pandemic, however there are many areas of concern that do not seem to be under tight administration.
The Old Lady has no control
As I have been saying in for the last eighteen months or so, the Governor of the Bank of England appears to be continuing to steer the Old Lady only reactively and not proactively.
And now, we even have our Chancellor of the Exchequer wanting recession – because he sees that as being the way to cope with inflation. It is suggested that recession is his way of controlling price rises.
Caps is ‘craps’
But what about the idea of calling the big food store bosses in for a meeting at Downing Street and suggesting that they put caps on certain food products.
Lowest possible amounts to be charged for milk and bread – is that what Sunak and Hunt consider is the staple diet of the UK households?
In my view - caps is ‘craps’.
It feels as though we are walking swiftly into the devil’s chambers, especially with such ‘hair-brained gimmicks’ being suggested.
Closing the stable door after the horse has bolted – comes quickly to my mind.
Pick a number and that is the new rate
As for the officially declared rate of inflation – being down to 8.7% in April, against 10.1% in March – that is a load of tosh, in my extremely humble view.
Just ask any housewife what she considers that the rate of inflation has been in her household over the last year – I assume it would be a multiple of the CPI rate.
The new scourge is ‘shrinkflation’
And now she is obliged to contend with the swift passage of ‘shrinkflation’ hitting any number, if not all, of her foodstuffs and household products in her favourite supermarkets.
Understandably, perhaps, the ‘high-cost’ foods have now been held back from supermarket shelves to deter shoplifters.
Marks and Sparks have reduced the number of steaks that it might have out on display on its shelves, in order to block starving thieves.
As an example, look at what Lurpak has just introduced – despite having raised its prices by nearly 20% over the last year to eighteen months, it is now slicing its quantity offered.
Its maker, Arla Foods, has shrunk its 250g packs of butter down to 200g.
That is effectively a 50% increase in that short period of time.
Comparing that with the official rate of ‘food inflation’ being 15.5%.
It is still a load of cobblers
The Co-op is reported as keeping jars of instant coffee in security cases, following the price of Douwe Egbert and Kenco Smooth a 200g jars rising through the £10 level.
A Co-op spokesman is said to have stated that:
“Protecting the safety of colleagues is a priority and shoplifting can be a flashpoint for violence.”
2% target is laughable
As for the B of E being tasked with keeping the rate of inflation down to 2% - that could well take another two years or thereabouts to show through.
Goldman Sachs experts, and there are an awful lot of them, are suggesting that not until 2026 could we possibly see that rate occurring again.
Although they are stating that they see the ROI coming down to 4.7% by the end of this year.
What branch of Specsavers do they go to - because next time I need a new pair I certainly will not use their particular shop for my testing.
And as for young Rishi Sunak – he is anticipating an even steeper fall – I bet he doesn’t go to Specsavers because they go to him.
Interest rates are about to move to 5% then 5.5% in my view – not that the benefits of such higher rates will drop down to the pockets of savers in the UK.
Savers losing out again
The banks are still being very mean to savers in continuing to pay such low rates for deposits.
That is sure to continue for as long as they can get away with collecting ‘cheap money’ enabling them to still lend it out at 20% to 30% rates for their credit card holders.
Mortgage offers being pulled
Also, what about the number of mortgage offers that have been cancelled out recently – some 800 or more having been pulled by the lenders because of higher rates due soon to be announced, thereby making borrowings that much more unaffordable.
That reflects banks and building societies repricing their loans after a sharp rise in borrowing costs.
Lower house prices
That is going to hit a lot of buyers on the lower rungs of house chains.
House sales fell by 25% in April, according to the HMRC.
House prices will easily fall back by 10% or a lot more from their Pandemic peaks.
Already a dearth of For Sale notice boards is becoming apparent – which is showing the way that new buyers should hold back for a while until asking levels drop more.
Ringing the bell? Not yet
As always – nobody ever rings the bell at the right time to buy – but it still requires patient attention.
By the way did you know that the cost of re-mortgaging has risen nearly 40% in the last four years?
An expert in nothing
I am no expert in economics, finance or for that matter in anything, albeit I do have an opinion.
But I could go on with this litany of bearish comments, however I will not do so.
Certainly, I have made loads of mistakes in my life, but those who know me recognise that I am an optimist, that I always look for the good bits.
Stick to quality and value
However, considering the facts in my article here makes me hope that some semblance of order can be brought into play as soon as possible.
In conclusion – without hesitation I repeat my constant mantra - ‘stick to quality and value’ and only believe what you can see.