‘A growing number of Germans have been forced to change their grocery shopping habits amid soaring prices, data from Deloitte’s Global Consumer Pulse Survey showed this week. According to the findings, many consumers are either buying cheaper food or dropping certain product groups from their shopping lists.

Around 37% of respondents said they now prefer to buy cheaper supermarket brands, while 35% said they are buying cheaper types of meat. A fifth of respondents said they are constantly buying less groceries than they want, while a fourth said they now buy only the essentials, cutting back on sweets and delicacies.

“The numerous crises and challenges of recent years have caused consumers to change their habits and routines in order to make do with the financial resources available to them. This affects a wide range of areas of everyday life – including nutrition. Our research shows: for many consumers, saving money on food purchases is the order of the day,” Deloitte states, adding that one in three consumers is “financially stressed” when shopping for groceries.

Researchers also noted that only 41% of respondents said they have an understanding of why the prices are at their current elevated level and complained of the lack of transparency when it comes to price formation. More than two-thirds of respondents (64%) said they feel that companies are raising prices more than their increased costs require, and are thus making additional profits.

Annual inflation in Germany was confirmed to be at a 14-month low of 6.1% in May 2023, down from 7.2% in the previous month, but remained well above the European Central Bank’s target of 2%. Food prices slowed their climb from the previous month, but remained in the double digits at 14.9%, led by dairy products (28.2%) and bread and cereals (19.3%).

Deloitte’s analysis is based on a representative survey of around 25,000 consumers from 25 countries, including around 1,000 from Germany. The survey was conducted on April 20-26, 2023. According to Deloitte, there was also a supplementary survey in June with an identical sample.’

 Chris Hedges in a recent interview with Cornel West, a third party canddate in the 2024 US Presidential election and supporter of Bernie Sanders in the 2020 race, described Patrice Lumumba as ‘a real freedom fighter.’

Chemical manufacturer 3M Co. will pay at least $10.3 billion to settle lawsuits over contamination of many U.S. public drinking water systems with potentially harmful compounds used in firefighting foam and a host of consumer products, the company said Thursday.

The deal would compensate water providers for pollution with per- and polyfluorinated substances, known collectively as PFAS — a broad class of chemicals used in nonstick, water- and grease-resistant products such as clothing and cookware.

Described as “forever chemicals” because they don’t degrade naturally in the environment, PFAS have been linked to a variety of health problems, including liver and immune-system damage and some cancers.

The compounds have been detected at varying levels in drinking water around the nation. The Environmental Protection Agency in March proposed strict limits on two common types, PFOA and PFOS, and said it wanted to regulate four others. Water providers would be responsible for monitoring their systems for the chemicals.

The agreement would settle a case that was scheduled for trial earlier this month involving a claim by Stuart, Florida, one of about 300 communities that have filed similar suits against companies that produced firefighting foam or the PFAS it contained.

3M chairman Mike Roman said the deal was “an important step forward” that builds on the company’s decision in 2020 to phase out PFOA and PFOS and its investments in “state-of-the-art water filtration technology in our chemical manufacturing operations.” The company, based in St. Paul, Minnesota, will halt all PFAS production by the end of 2025, he said.

The settlement will be paid over 13 years and could reach as high as $12.5 billion, depending on how many public water systems detect PFAS during testing that EPA has required in the next three years, said Dallas-based attorney Scott Summy, one of the lead attorneys for those suing 3M and other manufacturers.

The payment will help cover costs of filtering PFAS from systems where it’s been detected and testing others, he said.

“The result is that millions of Americans will have healthier lives without PFAS in their drinking water,” Summy said.

Earlier this month, three other companies — DuPont de Nemours Inc. and spinoffs Chemours Co. and Corteva Inc. — reached a $1.18 billion deal to resolve PFAS complaints by about 300 drinking water providers. A number of states, airports, firefighter training facilities and private well owners also have sued.

The cases are pending in U.S. District Court in Charleston, South Carolina, where Judge Richard Gergel is overseeing thousands of complaints alleging PFAS damages.

A trial of a complaint by the city of Stuart, Florida, had been scheduled to begin this month but was delayed to allow time for additional settlement negotiations.

Most of the lawsuits have stemmed from firefighter training exercises at airports, military bases and other sites around the U.S. that repeatedly used foams laced with high concentrations of PFAS, Summy said.

The 3M settlement is subject to court approval, he said.

3M’s website says the company helped the U.S. Navy develop foams containing PFAS chemicals in the 1960s.

“This was an important and life-saving tool that helped combat dangerous fires, like those caused by jet fuel,” the company said.

3M said its participation in the settlement “is not an admission of liability” and said if it was rejected in court, “3M is prepared to continue to defend itself.”

The cost of cleansing PFAS from U.S. water systems eventually could go much higher than the sums agreed to in the settlements, Summy acknowledged.

“I’m not sure anyone knows what that ultimate number will be,” he said. “But I do think this is going to make a huge dent in that cost … and you don’t have to litigate for the next decade or longer.” ‘

New York Post  23/6/23

‘The UK’s cost-of-living crisis is fuelling a surge in shoplifting, according to a report published on Thursday by the British Association of Convenience Stores (ACS).

ACS data showed that more than 1.1 million incidents of theft were recorded at stores across the country over the past year – the highest level in a decade, and up from 970,000 the year before. The most commonly stolen items were meat, alcohol and sweets, which are typically considered high value items that can be resold.

James Lowman, chief executive of ACS, said the levels of theft happening daily were “unprecedented.” 

“Repeat offenders, known to the community and known to the police, are stealing without fear of reproach,” he claimed.

ACS, which represents small stores across Britain, estimated that shoplifting has cost retailers £125 million ($159 million) over the past year, which is about £2,574 per store.

Some retailers noted that theft rates were partly affected by an increase in gang activity and people with addictions stealing to fund their drug or alcohol habits. However, 79% of those surveyed said they believe that the cost-of-living crisis is the main driver behind the surge in theft, as a growing number of people are struggling to afford basic items while prices continue to rise.

The report by ACS came after official figures released on Wednesday showed that UK inflation in May stood at 8.7%. That was unchanged since April, when it fell to single digits for the first time since last summer.

Grocery price inflation dropped from a 45-year-high of 19.1% in April to 18.3% last month, although the cost of food itself in UK stores still rose 0.9% in May alone.

According to a recent forecast from the Paris-based Organization for Economic Co-operation and Development (OECD), the UK will have one of the highest inflation rates of any major developed economy this year.

The ACS survey was conducted between February 13 and March 31. The calculations were based on crimes faced by retailers over the previous 12 months.’

‘Britain’s public sector net debt in May reached its highest level in over six decades and now exceeds the country’s annual economic output, the Office for National Statistics (ONS) revealed on Wednesday. This comes as government borrowing has outpaced expectations.

Public sector net debt excluding borrowing from state-controlled banks hit £2.567 trillion ($3.28 trillion) at the end of last month, which amounted to 100.1% of gross domestic product (GDP), the ONS said.

This is the first time that debt has stood above 100% of the country’s GDP since 1961, meaning that public sector borrowing is now larger than the UK’s economy.

Government borrowing reached £20.045 billion ($25.5 billion) in May, down £3 billion ($3.8 billion) from April but still exceeding consensus expectations of £19.5 billion ($24.8 billion), according to the ONS. Last month’s borrowing figure was £10.7 billion ($13.6 billion) higher than in May 2022 and was the second-highest level recorded in the month of May since monthly records began in 1993.

The ONS released the debt figures along with the latest inflation data, which showed that consumer price growth remained persistently high in Britain.

“This will likely drive up spending through increased debt interest payments and inflation-linked benefits and tax credits,” PwC economist Divya Sridhar said.

Inflation in the country stood at 8.7% in May and exceeded expectations for the fourth month in a row.’

 Friday 23 June 19.30 (GMT + 1)

Perhaps the governor of the Bank of England, Andrew Bailey, should get himself booked on to the next series of the radio comedy game show,

I’m Sorry I Haven’t A Clue. Except this increase in the bank rate is no laughing matter. How much pain, desperation and despair is it going to take before you shake off your lethargic support for this social system that is based upon the exploitation of the majority and you realise that capitalism doesn’t give a jot about you?

‘The British Tory government, like the New Zealand Labour government, believes that high interest rates reduce demand and therefore limit price rises. In March 1984 the bank minimum lending rate was 8 percent Since then it has risen to the present 15 percent. So prices ought to have stopped rising. Actually they have gone up by 43 percent since March 1984 and are now rising faster than they were then. Since higher interest rates increase the income of the lenders by exactly the same amount as they reduce the spending power of borrowers, why should demand be affected?’

Socialist Standard Editors August 1990

From the MailOnline, June 22, ‘Andrew Bailey today told Brits to stop demanding ‘unsustainable’ pay rises after the Bank of England ramped up interest rates in a bid to curb inflation.

The governor warned that the current level of wage settlements ‘cannot continue’ as he defended heaping misery on mortgage-payers by raising the base rate from 4.5 per cent to 5 per cent.

Speaking to broadcasters after the bombshell move – far bigger than the 0.25 percentage point hike analysts have expected – Mr Bailey denied that he actively wanted to trigger a recession.

But he made clear he will do ‘what is necessary’ to bring inflation back to the 2 per cent target – less than a quarter of the current reading.

High wage settlements are among the factors that have spooked the markets and forced the Bank’s hand, although it has been heavily criticised for failing to act early enough to combat prices.

Asked whether people were asking for too much, Mr Bailey – who earns around £575,000 a year – said: ‘Let me be very clear on this, because it’s an important issue.

‘We’ve got to get and we will get inflation back to its target.

‘To do that I have to be clear – and we expect inflation to come down this year – to do that we cannot continue to have the current level of wage increases,

‘And we can’t have companies seeking to rebuild profit margins which mean prices continue to go up at their current rates.

‘But what I would say to people is we expect inflation to come down, and it is important then that price setting and wage setting reflects that.

‘Because the current levels, I’ll be absolutely honest, are unsustainable.’

Amid mounting panic in Tory circles, Rishi Sunak voiced support for the Bank’s tough action. He also tried to cool concerns with a folksy town hall event performance insisting he is ‘100 per cent on it’.

Chancellor Jeremy Hunt also offered gave strong backing to the Bank, saying controlling prices is the ‘only long-term way to relieve pressure on families with mortgages’.

‘If we don’t act now it will be worse later,’ he added.

Mr Bailey has been coming under intense fire for failing to respond to inflation earlier, with some Treasury advisers arguing that Threadneedle Street now has no option but to force a recession…’

https://www.dailymail.co.uk/news/article-12223281/BoE-chief-Andrew-Bailey-blames-unsustainable-pay-rises-rate-hike.html

Boiling a frog apologue has the frog frog put into lukewarm water and as the temperature increases the fog doesn’t notice that when the water boils the frog won’t survive. “It’s unlikely that prices will return to where they were.” When a rocketing commodity price drops by a few pence the relief consumers feel at a minimal saving engenders acceptance that the previous cheaper base cost will not reoccur.

Socialists are careful about making  predictions as to what a future socialist society will exactly be like. However, some things are self evident. There won’t be such a thing as inflation. Why? Because it will be a money-free society with goods and services produced for the common good, not for profit. There won’t be people being driven to despair because they can’t afford their rent, their mortgages, their energy bills or any other basic necessity of life which under capitalism is ‘can’t pay, don’t get.’

‘Grocery inflation in the UK has started to ease as two separate surveys suggest that food-price growth may have passed its peak, Bloomberg reported on Tuesday.

Food inflation in the country fell for the third consecutive month in June but still remains at 16.5%, down from 17.2% the previous month, according to data from market-research company Kantar.

Inflation stands at its sixth-highest level since the financial crisis in 2008, according to Kantar. Eggs, cooking sauces and frozen potato products saw the biggest price rises.

Another study, conducted by Lloyds Bank, said food-production costs in the UK declined for the first time in May since 2016.

Grocery-price growth reached 19.1% in April, which was the highest rate in more than 45 years, according to the Office for National Statistics (ONS).

Bank of England Governor Andrew Bailey earlier warned that the easing of inflation could take longer than expected.

“The ongoing squeeze is clearly weighing on the nation’s mind,” head of retail and consumer insight at Kantar, Fraser McKevitt, said. “Of the top five financial worries that consumers have, rising grocery prices is the only one that they are more concerned about now than at the start of this year.”

An index tracking costs for food and drink producers fell for the first time in more than seven years, a Lloyds’ survey showed. However, “it will still take some time before we see the benefit in terms of shelf prices,” according to Annabel Finlay, managing director of food, drink and leisure at Lloyds Bank Commercial Banking.

“This is, in part, due to the long-term nature of contracts between the manufacturers and retailers, as well as the broader segments of the production chain,” she added.

Earlier, UK officials reportedly met with supermarket bosses to negotiate price cuts, reassuring them that any scheme to help bring down food prices for consumers would be voluntary.

Last week Ken Murphy, CEO of Britain’s biggest supermarket chain Tesco, pointed to some signs of cooling grocery inflation after the company cut prices on bread, pasta and broccoli, but admitted that “it’s unlikely that prices will return to where they were.”’

‘The UK will have one of the highest inflation rates of any major developed economy this year, the Organization for Economic Co-operation and Development (OECD) reported on Wednesday.

According to the forecast, British inflation, which only recently fell to single digits for the first time since last summer, will be higher in 2023 than nearly any G20 member except Argentina and Türkiye.

Although headline inflation in the UK declined to 8.7% in April from 10.1% in March amid cooling energy prices, food inflation has been stubbornly high. Grocery price growth reached 19.1% in April, which is the highest rate in more than 45 years, according to the Office for National Statistics.

The OECD predicted that even as Britain is expected to narrowly avoid a recession in 2023, higher interest rates are likely to dent economic growth and incomes in the coming months.

“The high interest burden on public debt and the recent drop in average debt maturity leave the public finances exposed to movements in bond yields,” the OECD said in its Economic Outlook.

The Paris-based organization expects the UK’s economy to grow by 0.3% this year and by 1% in 2024. It noted, however, that the forecast includes “significant risks.”

Renewed increases in wholesale energy prices will “further squeeze real incomes given the United Kingdom’s high dependence on natural gas. Faster-than-expected resolution of uncertainty regarding future trade relationships is an upside risk,” the forecast warned.

Responding to the OECD data, UK Chancellor Jeremy Hunt admitted that inflation was still “too high,” adding that “we must stick relentlessly to our plan to halve it this year. That is the only long-term way to grow the economy and ease the cost-of-living pressures on families.”

The inflation rate in Britain should average 6.9% by the end of the year, the report concluded.’

The market is ‘arguably broken.’ It’s capitalism which is unarguably broken,

The economic and social misery that increased mortgage rates impose on first time house buyers, those who have still to pay off their mortgages, and private renting tenants (when landlord mortgage repayments exceed rental income). An important question that arises from the continuing damage that capitalism imposes upon the vast majority is why does the majority continue to allow this social system, – which has long outlived its historical usefulness as the necessary epoch which precedes socialism – to continue to exist when the obvious solution is ready and waiting?

The extracts below demonstrate the historical fallacy that higher interest rates reduce inflation:

“When this and other anti-inflationary tactics didn’t work, the eventual method settled upon by Thatcher and her Chancellor Nigel Lawson was to use interest rates as a policy instrument. In her memoirs, Thatcher stated that in her view ‘the only effective way to control inflation is by using interest rates to control the money supply

It is notable that interest rates have been used as the main policy instrument for controlling inflation ever since, by the governments of Major, Blair and now Brown. This is despite the fact that as a policy it not only arose by default, but has little to practically recommend it. The theory is that when interest rates rise, people borrow less and cut their spending. But this only takes into account one aspect of what happens. Interest rates are the price of borrowing and lending money and when interest rates rise, lenders are affected just as positively as borrowers are affected negatively. A movement in interest rates changes the terms of the relationship between borrowers and lenders in an economy and can create a short term economic disturbance, but it does not affect the level of purchasing power as a whole and can have no significant and persistent effect on the price level (for example, while those with mortgages and other loans are disadvantaged by higher interest rates, those with savings, interest-bearing investments, etc gain to a similar overall extent).

That raising interest rates cannot halt inflation – or even slow its rate of growth – has been demonstrated by a close look at economic history. During the time when Thatcher was Prime Minister the Minimum Lending Rate (as it was then called) for the banks rose from 9 per cent in 1988 to 15 per cent in 1989 yet the Retail Price Index (RPI) increased considerably across the entire period, having an average annual rate of 4.1 per cent in 1987 that had become 9.5 per cent by 1990.”



That raising interest rates cannot halt inflation – or even slow its rate of growth – has been demonstrated by a close look at economic history. During the time when Thatcher was Prime Minister the Minimum Lending Rate (as it was then called) for the banks rose from 9 per cent in 1988 to 15 per cent in 1989 yet the Retail Price Index (RPI) increased considerably across the entire period, having an average annual rate of 4.1 per cent in 1987 that had become 9.5 per cent by 1990.”

Dave Perrin. Crisis and Inflation: Back to the Future. 

Socialist Standard November 2008.

“The latest mortgage data from Moneyfacts reveals average interest rates hitting the 6% figure.

For residential mortgages, the average two-year fixed rate increased from 5.98% on Friday to 6.01% today, while the average five-year fixed rate increased from 5.62% to 5.67%.

The product count fell from 4,923 on June 16 to 4,683 June 19.

For buy-to-let mortgages, the product count fell from 2,589 on Friday to 2,515 June 19.

The average two-year fixed rate increased from 6.21% on Friday to 6.30% today, while the average five-year fixed rate increased from 6.17% to 6.23%”.

https://www.mortgagestrategy.co.uk/news/average-resi-two-year-fix-hits-6-moneyfacts/

‘In May, the Bank of England said 1.3 million fixed-rate mortgages were set to mature before the end of 2023, with a larger number up for renewal in 2024.

“The market is dysfunctional and arguably broken,”Martin Stewart, director of mortgage advisory London Money, told CNBC. “We have seen evidence where advisers are in queues alongside 2,000 others all trying to secure something that might not actually exist by the time they get to the front of the queue.”

The industry expert added that the last nine months have been “seismic” for the mortgage and housing sector, “on a par with the financial crisis,” although with different causes.

More than a quarter of UK homeowners on a fixed-rate mortgage are now projected to head for sharp increase in monthly payments, once their current deals expire.

Mortgage costs in Britain have been growing sharply in recent days, ahead of an expected interest rate hike by the Bank of England later this week. The regulator is likely to raise borrowing costs for a 13th consecutive time on June 22, in an effort to tame raging inflation’.

More than a quarter of UK homeowners on a fixed-rate mortgage are now projected to head for sharp increase in monthly payments, once their current deals expire.’

 There are still a few spaces available for Summer School, so bookings remain open for now. For more information about the event and details about how to book a place, click here.   The event will now also include a bonus session – a Saturday afternoon of mosaic-making!