Exports are up for the moment but when hedging runs out a weak pound will drive up the costs of imported materials and energy. We don't have vast natural resources to rely on to fuel that manufacturing boom. It might benefit exports over all but it won't be painless by any means.
Crumbs. Exceedingly good cakes, meat dressing price hike in wake of the Brexit
Life is about to get more expensive for anyone in Britain that favours a French Fancy, an Angel Slice or indeed any other “exceedingly good” cake from a certain baker. The sad (for some) news reaches El Reg that Premier Foods, the parent of Mr Kipling, is poised to hike prices to retailers. “The situation on pricing differs …
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Tuesday 10th January 2017 19:24 GMT Anonymous Coward
The biggest cost to most businesses is their employees, not the cost of raw materials. This is especially true of our service exports. What you'll find is that foreign owned firms in the UK need to increase their prices to maintain the same profits in foreign currency, this puts UK owned firms in a far more competitive position than foreign owned firms as they don't have to maintain the constant currency equivalent of profits. In no way does a 10% fall in sterling equate to a 10% rise in a UK manufactured finished product price increase, sheer profiteering using Brexit as an excuse. But hey that's business, isn't it great ?
Note Japanese company Nissin owns a 17% stake in Premier foods, who make Mr Kipling's cakes.
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Wednesday 11th January 2017 04:37 GMT streaky
Rates of inflation are a myth in the real world. Basket prices used to measure don't necessarily match the cost of things we're actually buying and have no relation to volumes people are buying at.
If the rate is 5% it doesn't automatically mean people are having to spend 5% more to get the same items - because there isn't much stopping people switching brands and yes that does drive the importers nuts; but it should. Not that there's a better way of measuring price increases at a macro level. Well we probably could with supermarket data but only supermarkets have that...
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Wednesday 11th January 2017 09:56 GMT tiggity
Indeed. +1ed
The inflation rates rarely seem to relate to increases in my usual shopping / services / utility / travel expenses.
Usually when inflation is quoted at X I find my outgoings have increased by Y (where Y > X)
Maybe I'm just totally atypical compared to the weighted basket of goods, maybe it's due to some of the many flaws in the methods used to calculate inflation (e.g. RPI all about cost change in weighted basket of goods, not about cost to maintain your standard of living - the "basket" is typically a poor estimate of an individuals unique cost of living). Classic example is rented accommodation with limited availability, people I know who rent have had (significantly) above inflation rent increases for years, and as rent is by far their main outgoing they experience a cost of living rise way higher than headline inflation
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Wednesday 11th January 2017 14:36 GMT Doctor Syntax
"The biggest cost to most businesses is their employees, not the cost of raw materials."
So either the employees absorb the effect of rising cost of imports on their purchases or they get paid more. Either that biggest cost increases or employees subsidise their employer. Never mind, they're getting back control.
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Wednesday 11th January 2017 09:05 GMT James 51
Re: My toothpaste
The UK has offically been metric since before I was born and the goverment has been pushing for it before we were members of the EEC. We really need to consign that completely illogical system to history. If we start exporting stuff we're going to need to use units of measurement everyone can understand. Not to mention they are a nightmare to teach to children.
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Wednesday 11th January 2017 14:43 GMT Doctor Syntax
Re: My toothpaste
"We really need to consign that completely illogical system to history."
Along with metric. Do things right. Binary would be a bit cumbersome but octal or hex would be fine. The evolutionary chance that gave us 5 digits on each hand is a pretty dumb basis for a numbering system.
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Tuesday 10th January 2017 17:08 GMT Tezfair
it's easy to resolve...
get out of EU asap
cut fuel duty as oil in any form is the root of just about everything in modern life
cut VAT back to 15 or 17.5%
it's the taxes that's killing us, cut that back encourages growth, thus manufacturing gets healthy. Gov wins, we win
It's only because the gov wants to clear it's debts that we are all suffering.
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Tuesday 10th January 2017 18:11 GMT Cynic_999
Re: it's easy to resolve...
"
So much less tax for like paying the NHS and pensions, etc?
"
Or we could keep those things the same and instead cut back on illegal wars, vanity projects such as millennium domes, excessive pay rises for civil servants and unnecessary HS railways. (Though a few inflated pensions of ex-government employees could be reduced a tad with no ill effect). Maybe we could even increase the price of food & booze for MPs to make it the same as the plebs have to pay. Given the readership, I'd better not suggest stopping the practice of spending £billions of our taxes on various computer projects than never had a hope of working.
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Tuesday 10th January 2017 18:54 GMT Fruit and Nutcase
Re: it's easy to resolve...
@Cynic_999
Given the readership, I'd better not suggest stopping the practice of spending £billions of our taxes on various computer projects than never had a hope of working
Somehow I think the readership do take issue with overspend and waste especially when it is our taxes. The money usually goes to line the pockets of the usual suspects and serial offenders and the government of the day never seems to learn. In fact, the larger the waste, the more likely you are to be given even more money to waste next time
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Tuesday 10th January 2017 19:11 GMT Paul Crawford
Re: @ Cynic_999
So here is your politician's choice when faced with a tax shortcoming:
1) "Or we could keep those things the same and instead cut back on illegal wars, vanity projects such as millennium domes, excessive pay rises for civil servants and unnecessary HS railways"
2) Cut back on NHS and public pensions?
What do you really expect them to do?
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Wednesday 11th January 2017 04:41 GMT streaky
Re: it's easy to resolve...
instead cut back on illegal wars
I get that people think this stuff is funny but our illegal wars are actually a large portion of UK GDP- both in terms of keeping people directly employed and being able to produce stuff that can be exported. World peace would cause world depression - and tech advancement would grind to a halt fwiw.
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Wednesday 11th January 2017 07:43 GMT Flocke Kroes
Re: it's easy to resolve...
"Being able to produce stuff that can be exported". So we are able to produce stuff, but don't, and it could be exported but we don't.
Imagine instead of buying bombs and bullets we buy are soldiers beer, and instead of fighting wars, our soldiers have parties. Still got manufacturing and employment for our GDP, but we make fewer enemies. I have confidence in our soldiers, but I am sure even they cannot drink our entire arms budget. Send the surplus beer to our enemies, and perhaps we will have more friends.
"tech advancement would grind to a halt". ROTFLAO.
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Tuesday 10th January 2017 20:06 GMT Anonymous Coward
Re: it's easy to resolve...
"So much less tax for like paying the NHS and pensions, etc?"
You pay something out of your wages called 'National Insurance' which are supposed to fund those...
...or not, if you happen to be one of that special breed of "IT Contractor" who think that National Insurance is for other people.
<nineties_flashback/>
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Tuesday 10th January 2017 20:45 GMT Paul Crawford
Re: @AC
For 2017 NI income is £127 billion (apparently http://www.ukpublicrevenue.co.uk/breakdown)
Expenditure is Public Pensions = £157 billion and National Health Care = £143 billion
So if you thought that NI alone covered it, and not a significant chunk of general taxation, you are in for a rude surprise.
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Friday 13th January 2017 13:04 GMT Anonymous Coward
Re: @AC
"So if you thought that NI alone covered it"
Oh come on,we all know that NIC hasn't been significantly increased in, well, forever - unlike the escalating cost of the NHS services and pensions which as you rightly point out now dwarfs NIC receipts.
The point remains that NIC comes from personal income taxation and is supposed to contribute to these public services - and in the '90s especially, large numbers of so-called contractors arranged their company finances so as to pay minimal PAYE and often no NIC at all.
I'm assuming the numerous downvoters were NIC-dodgers. Well thanks guys for IR35 which was the inevitable result of that behaviour. Well done.
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Wednesday 11th January 2017 15:03 GMT Doctor Syntax
Re: it's easy to resolve...
You pay something out of your wages called 'National Insurance' which are supposed to fund those...
"Supposed" is the operative word there. NI has been part of general taxation for many years.
The Treasury really, immensely, tremendously hates with a vengeance the very idea specific taxes going to specific expenditure as it wouldn't be able to get its claws on them. It invented an ugly word to describe them: "hypothecated". Would you want to pay something as nasty-sounding as a hypothecated tax? Of course if you knew that NI went to the NHS, pensions etc. or Vehicle Excise Duty under its old name of Road Fund was spent on roads you'd think it was a good idea.
Ideally NI would go direct to the relevant spending departments and VED would go direct to the DoT & Highways Agency and even a contribution to the NHS to cover the costs of treating RTA injuries. That would force governments to be a bit more upfront about general taxation levels.
And a final point about NI. I take it you pay NI as part of PAYE. Do you realise that you only pay employee's NI? Freelancers pay both employee's and employer's contributions. Maybe you didn't know that.
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Tuesday 10th January 2017 23:39 GMT TVU
Re: it's easy to resolve...
" it's easy to resolve...
get out of EU asap"
*sigh* When will this spate of Brexit hoodoo economics ever end? Economic isolation and separation from the single market area will result in service and manufacturing businesses relocating within the single market area, more unemployment and economic stagnation and recession.
Furthermore, there is this grand delusion that's exhibited by Brexit supporters that all foreign investors will opt for investing in a small market of 64 million people over investing in a much larger unified market of well over 400 million people. That is just not going to happen.
Yes, there will be beneficiaries from a hard Brexit but they will be Paris, Frankfurt and the Republic of Ireland and certainly not British workers.
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Thursday 12th January 2017 21:41 GMT Anonymous Coward
Re: it's easy to resolve...
Furthermore, there is this grand delusion that's exhibited by Brexit supporters that all foreign investors will opt for investing in a small market of 64 million people over investing in a much larger unified market of well over 400 million people. That is just not going to happen.
No, they'll continue to invest in the total market of 464million. Why would they do otherwise if they can make money with it?
Yes, there will be beneficiaries from a hard Brexit but they will be Paris, Frankfurt and the Republic of Ireland and certainly not British workers.
That's what the EU want to see, of course, to punish the UK for daring to leave their cosy little club, but it won't be like that (unless the remoaners continue to work against exit just for spite). There's too much money at stake, and too many people who aren't daft enough to pour good money after bad into failing eurozone regions like Paris.
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Wednesday 11th January 2017 02:08 GMT Schultz
"It's only because the gov wants to clear it's debts that we are all suffering."
I hate to break it to you, but those are really your debts, taken on by your government in your name. (I assume that you interact with said government by voting, paying taxes, receiving benefits, using public infrastructure, ...)
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Tuesday 10th January 2017 17:13 GMT Lars
Oh dear
Why this topic, when the Sterling goes down something else goes up, good for some and not good for others. I live in a country who got fed up with the ten-yearly devaluation and joined the Euro hoping for a less easy and more intelligent solution to dealing with the reality. Could it be, that after all, the UK has had to wake up to the reality of a country who, living in the past, and totally unaware of how fast the country has gone towards a "I wash your feet, and you cut my hair" economy. If so, welcome to the reality, dear Brits, the silver lining of Brexit perhaps.
Biting the hand that feeds IT
