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Two rather worrying things emerge from a poll highlighted in today's Guardian.
Only around a third of people can accurately say what a 5% annual inflation rate would do to the cost of a £1 loaf.
Halving inflation (as Sunak has promised to do) will not mean that prices go down. But when Survation asked people what it would mean in practice, most people wrongly said that the pledge would either mean prices going down (32%) or staying the same (31%). Only 23% said that this still meant prices would go up.
No doubt Sunak realises that his promise on inflation may well be so misinterpreted.
Of course, I do realise that some people do struggle with maths and the like, but I would have expected a much greater overall understanding than this.
[Post edited 21 Jun 2023 11:09]
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Slightly disturbing findings on public understanding of inflation on 10:56 - Jun 21 with 3114 views
Slightly disturbing findings on public understanding of inflation on 11:02 - Jun 21 by Dubtractor
I'm genuinely bemused at how aiming to reduce inflation to 5% is being bandied about as some great target.
The long term impact of compound inflation from 10% then 5% for the last 2 years is absolutely disastrous.
It's quite clear supermarkets and others have used this for their own ends as well. The prices of some things have gone up by about 50%. Thankfully I am in a position where it doesn't affect me too much but even so, when you see something that was £2 a year ago that is now £3.20 and things were £1 now selling for £2.10 etc it's worrying.
Talk about a perfect storm for people not tied into a decent interest rate or paying rent where the cost gets passed on.
Slightly disturbing findings on public understanding of inflation on 11:50 - Jun 21 by J2BLUE
It's quite clear supermarkets and others have used this for their own ends as well. The prices of some things have gone up by about 50%. Thankfully I am in a position where it doesn't affect me too much but even so, when you see something that was £2 a year ago that is now £3.20 and things were £1 now selling for £2.10 etc it's worrying.
Talk about a perfect storm for people not tied into a decent interest rate or paying rent where the cost gets passed on.
No. The cost does not get passed on, If it was that easy tp pass on rent increase they would have done it before
Any price is pitched at what the market will bear, not the price the seller wants, as any seller on Ebay will tell you.
However I agree that supermarkets have been exploiting xustomers. Food is not something is bought out of sdisposal income. You can decide whether you think a concet is worth it, that does not apply to food - especially when children are involved.
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Slightly disturbing findings on public understanding of inflation on 13:23 - Jun 21 with 2788 views
Slightly disturbing findings on public understanding of inflation on 11:50 - Jun 21 by J2BLUE
It's quite clear supermarkets and others have used this for their own ends as well. The prices of some things have gone up by about 50%. Thankfully I am in a position where it doesn't affect me too much but even so, when you see something that was £2 a year ago that is now £3.20 and things were £1 now selling for £2.10 etc it's worrying.
Talk about a perfect storm for people not tied into a decent interest rate or paying rent where the cost gets passed on.
Is life in this country becoming untenable for the younger population?
I heard the other day via James O'Brien someone earning £35k and unable to eat every day.
I'd love to earn £35k, which would require several years of experience as a healthcare professional.
Fortunately at the moment I am living on a very low rent, however I'm starting to wonder if I'm being insulated from the realities of life in the UK during a cost of living crisis, and that I may be in for a rude awakening at some point and left asking 'why the fook would anyone want to live here?'.
Just how bad are things in reality here?
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Slightly disturbing findings on public understanding of inflation on 10:56 - Jun 21 by Daninthecampo
And this is why you don't offer the public a referendum on important topics like Brexit!
Terrifying and incredibly depressing, however these stats aren't a surprise when you realise that the average reading age of an adult in the UK is the same as that of a 9-year-old. Which is terrifying and incredibly depressing...
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Slightly disturbing findings on public understanding of inflation on 13:20 - Jun 21 by HARRY10
No. The cost does not get passed on, If it was that easy tp pass on rent increase they would have done it before
Any price is pitched at what the market will bear, not the price the seller wants, as any seller on Ebay will tell you.
However I agree that supermarkets have been exploiting xustomers. Food is not something is bought out of sdisposal income. You can decide whether you think a concet is worth it, that does not apply to food - especially when children are involved.
It might not be passed on in full but there are plenty of stories of people being told their rent is going up by £100+ per month and if they don't like it they can leave.
Some might be protected by a contact but it seems like many others aren't.
Slightly disturbing findings on public understanding of inflation on 13:23 - Jun 21 by ThisIsMyUsername
Is life in this country becoming untenable for the younger population?
I heard the other day via James O'Brien someone earning £35k and unable to eat every day.
I'd love to earn £35k, which would require several years of experience as a healthcare professional.
Fortunately at the moment I am living on a very low rent, however I'm starting to wonder if I'm being insulated from the realities of life in the UK during a cost of living crisis, and that I may be in for a rude awakening at some point and left asking 'why the fook would anyone want to live here?'.
Just how bad are things in reality here?
I agree.
I am definitely insulated/privilaged and incredibly grateful for it at the moment.
By the sounds of it, it's only going to get worse. I guess all people can do, if they can, is prepared as best they can. It's bleak though.
Slightly disturbing findings on public understanding of inflation on 18:28 - Jun 21 by factual_blue
So he wants to get away with this stuff by teaching people more maths.
He hasn't thought that through, has he?
Name me one thing he has clearly thought through.
Teaching more maths without qualifying as many teachers and increasing the rate of encouraging qualified ones to leave the profession. It is almost like his own grasp of maths is at or below the average. Either that or there is another agenda in persuading people we cannot afford a state education system once he has finished off the National Health Service. Defund, demoralise, privatise.
Slightly disturbing findings on public understanding of inflation on 11:02 - Jun 21 by Dubtractor
I'm genuinely bemused at how aiming to reduce inflation to 5% is being bandied about as some great target.
The long term impact of compound inflation from 10% then 5% for the last 2 years is absolutely disastrous.
Well debt goes down in relative terms. So if wages kept up with inflation, then is it still bad? If house prices go down or stay static for 5 years coupled with wages going up, then houses also become more affordable (assuming interest rates eventually come back down once inflation is under control).
But also if the value of the pound goes up, doesn't it get cheaper for us to import goods?
Disclaimer: I have no idea what I am talking about
Slightly disturbing findings on public understanding of inflation on 13:23 - Jun 21 by ThisIsMyUsername
Is life in this country becoming untenable for the younger population?
I heard the other day via James O'Brien someone earning £35k and unable to eat every day.
I'd love to earn £35k, which would require several years of experience as a healthcare professional.
Fortunately at the moment I am living on a very low rent, however I'm starting to wonder if I'm being insulated from the realities of life in the UK during a cost of living crisis, and that I may be in for a rude awakening at some point and left asking 'why the fook would anyone want to live here?'.
Just how bad are things in reality here?
Anyone who can't afford to eat daily on £35.000 pa must have a pretty poor grasp of domestic finance, or, have totally overstretched themselves when things were easier.. It's the poor sods on minimum wage who i feel sorry for.
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Slightly disturbing findings on public understanding of inflation on 19:48 - Jun 21 with 2259 views
What does 5% inflation to to a loaf? Does it make it softer and fluffier?
(I’m not surprised, there are some right divs around ).
Oh, and have you noticed that news outlets now have to patiently explain that a falling rate of inflation still means prices are going up. Apparently a lot of people think it means that prices are coming down
Slightly disturbing findings on public understanding of inflation on 11:50 - Jun 21 by J2BLUE
It's quite clear supermarkets and others have used this for their own ends as well. The prices of some things have gone up by about 50%. Thankfully I am in a position where it doesn't affect me too much but even so, when you see something that was £2 a year ago that is now £3.20 and things were £1 now selling for £2.10 etc it's worrying.
Talk about a perfect storm for people not tied into a decent interest rate or paying rent where the cost gets passed on.
There was quite a bit on this in the spring. Apparently supermarkets aren’t profiteering, as their profits are pretty much in line with where they normally are. Or to look at it another way, they’re passing all the increased costs onto us rather than share that extra burden by dipping into their profits. Whether that’s much better than profiteering, I’ll let you decide.
Sunaks toast then. 63% of the population think that prices won't rise when inflation comes down. But prices will rise - even if inflation is just 2% - they won't come down. People see prices rising and come to one conclusion - Sunak is just as bigger liar as Johnson.
Mortgage payers will hate Sunak for higher interest rates. High interest rates will be relatively ineffective in lowering inflation because the problems in the UK economy are on the supply side. The extra costs on the supply side are mainly down to Brexit - extra costs to import and export, slower supply chains leading to scarcity of some goods, missing immigrant workers 'cos it ain't worth the bother to work in the UK.
Holidaymakers hate all the passport control queues.
Sunaks voter base is finding more ways to hate the Tories everyday.
Don't believe a word I say. I'm only kidding. Or am I?
Slightly disturbing findings on public understanding of inflation on 19:57 - Jun 21 by Swansea_Blue
There was quite a bit on this in the spring. Apparently supermarkets aren’t profiteering, as their profits are pretty much in line with where they normally are. Or to look at it another way, they’re passing all the increased costs onto us rather than share that extra burden by dipping into their profits. Whether that’s much better than profiteering, I’ll let you decide.
I would like to see that properly analysed. I just don't believe that someone, whether it's supermarkets or manufacturers etc, isn't making profit out of this.
So many things have gone up massively so something is going on. It's actually worse the cheaper things are because something that was 50p going to 65p doesn't seem like a big deal until you think it's a 30% increase.
Supermarket profits might not be going up but are they hiding it by investing in the business so they don't get attention when things are bad? Not suggesting they are definitely doing that but something doesn't add up.
Slightly disturbing findings on public understanding of inflation on 20:51 - Jun 21 by J2BLUE
I would like to see that properly analysed. I just don't believe that someone, whether it's supermarkets or manufacturers etc, isn't making profit out of this.
So many things have gone up massively so something is going on. It's actually worse the cheaper things are because something that was 50p going to 65p doesn't seem like a big deal until you think it's a 30% increase.
Supermarket profits might not be going up but are they hiding it by investing in the business so they don't get attention when things are bad? Not suggesting they are definitely doing that but something doesn't add up.
Supermarket inflation does seem much higher than the overall headline rate. They complicate it with all the offers they do.
However, there is so much competition in the supermarket sector I would find it surprising if the rises are purely profiteering. One of them would break ranks and corner the market wouldn't they? Or are there issues with quantities of supply that prevent them doing so?
I would imagine increased import and transportation costs will be disproportionately affecting supermarket supply chains.
Slightly disturbing findings on public understanding of inflation on 19:48 - Jun 21 by Swansea_Blue
What does 5% inflation to to a loaf? Does it make it softer and fluffier?
(I’m not surprised, there are some right divs around ).
Oh, and have you noticed that news outlets now have to patiently explain that a falling rate of inflation still means prices are going up. Apparently a lot of people think it means that prices are coming down
[Post edited 21 Jun 2023 19:51]
I presume the issue in the OP is simple one-year inflation and not the impact of compounding it year-on-year.
Of course, too much inflation will make the loaf explode.
Slightly disturbing findings on public understanding of inflation on 20:51 - Jun 21 by J2BLUE
I would like to see that properly analysed. I just don't believe that someone, whether it's supermarkets or manufacturers etc, isn't making profit out of this.
So many things have gone up massively so something is going on. It's actually worse the cheaper things are because something that was 50p going to 65p doesn't seem like a big deal until you think it's a 30% increase.
Supermarket profits might not be going up but are they hiding it by investing in the business so they don't get attention when things are bad? Not suggesting they are definitely doing that but something doesn't add up.
It certainly feels as if there’s more going on. Most of the pre I’ve analysis stuff seems to concentrate on the big branches, but some of the increases in their ‘local’ stores are astronomical.
Slightly disturbing findings on public understanding of inflation on 21:38 - Jun 21 by Swansea_Blue
It certainly feels as if there’s more going on. Most of the pre I’ve analysis stuff seems to concentrate on the big branches, but some of the increases in their ‘local’ stores are astronomical.
And yet if you shop in Lidl and Aldi it seems that prices are not that much above where they were a couple of years ago.
No doubt if a poll was held on the phrase “cutting the deficit” only a minority would appreciate that still means we, as a country, owe more than we did a year ago.
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