Global climate pushing up food prices
Posted by Alan | Under Uncategorized Friday Aug 6, 2010
According to the British Retail Consortium, a group that represents about 80% of Britain’s retailers, the cost of food has gone up and the cost of non-food has gone down.
Stephen Robertson, director general of the BRC, said that the rise in food costs was due mainly to global factors including the record heat wave in Russia that damaged much of the wheat crop, driving wheat to its highest cost in 22 months.
Other climate-related problems around the world, i.e. the draught in Australia and floods in Canada, India and Pakistan contributed to the increase, as both livestock feed and many fruit crops suffered from either too much or not enough water.
The drop in cost of non-food goods such as clothing, flooring and furniture was the greatest in 18 months, according to the same report. This decrease resulted from retailers offering major discounts, so it is not really a reflection of the overall economic situation.
Policy makers at Bank of England are divided as to the degree of risk to the economy of inflation and budget cuts.
It is expected that they will vote to keep temporary stimulus measures in place at present. Economists also predict that the planned increase in the VAT as of January 2011 will cause a significant rise in the rate of inflation.
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