Producer prices at 16-year-high

[larry]

Makes Sense

As long as we demand cheaper stuff from China and given the increase in 'product recalls' last year, retailers will continue to do well.

[expat]

But that's not the problem though, is it?

The problem is that there does seem to be a trend in replacing them every two years. Consequently, they only make them to last that long.

Agreed. Same with mobile phones: made to last as long as the contract, if you're lucky. I have one that's failed after 15 months: 12-month guarantee, 18-month contract. Great.

Not only are things now made only to last until "it's time to buy a new one", there are more things to buy every couple of years.

Bear both of those points in mind when projecting your retirement:
1. you can't just buy all the toys while still working, then use them for decades. They won't last that long, so you'll need to budget for replacing them.
2. you could just live as you do now, on today's level of money; but more things will come along that you, like everybody else, will want to have: you might feel unhappy if you couldn't live in (e.g.) 2030's style in 2030, so you will need a 2030-level income.

[tim123]

Scarily true. Bought a £2.5k LCD TV a couple of years ago. Same model is half the price now. I only bought it coz I thought I'd have the biggest one on the street, but now any old chav can afford them.

But that's not the problem though, is it?

The problem is that there does seem to be a trend in replacing them every two years. Consequently, they only make them to last that long.

Personally, I expect something that I have paid a couple of grand for to last a lot longer. My first telly, that I paid circa 300 quid for in 1982 (so that's probaly around 2 grand in today's money) lasted 17 years before I had to throw it in a skip. I'd expect a new plasma/LCD to do likewise, but I bet it won't.

tim

[Dalek Supreme]

Space Cake.

Space Dust.

[miffy]

As long as they don't ask for fruity nut cake.

Space Cake.

[PAH]

Of course it's only at 2%. That 5 grand plasma TV that you replace every year is decreasing in price at 50% pa.

tim

Scarily true. Bought a £2.5k LCD TV a couple of years ago. Same model is half the price now. I only bought it coz I thought I'd have the biggest one on the street, but now any old chav can afford them.

[Ruprect]

Of course it's only at 2%. That 5 grand plasma TV that you replace every year is decreasing in price at 50% pa.

tim

Have you been spying on me?

[tim123]

its OK though, coz inflation is only at 2.1% (or thereabouts) - soaring food, fuel, house and electricity prices have nothing to do with it.

Of course it's only at 2%. That 5 grand plasma TV that you replace every year is decreasing in price at 50% pa.

tim

[Churchill]

Thank god for the Iraq war, for ensuring cheap oil and our continued prosperity. Not to mention the world is a safer place.

Hallelujah!!!

Churchill - In "Are we still allowed to say Hallelujah?" mode...

[Bagpuss]

Producer prices at 16-year-high

The soaring cost of food is being passed on down the supply chain
Price inflation of goods leaving UK factories has reached its highest rate in 16 years, driven higher by petrol and food costs, official figures show.

Thank god for the Iraq war, for ensuring cheap oil and our continued prosperity. Not to mention the world is a safer place.

[Ruprect]

its OK though, coz inflation is only at 2.1% (or thereabouts) - soaring food, fuel, house and electricity prices have nothing to do with it.

[Churchill]

As long as they don't ask for fruity nut cake.

Squirrel Nut Cake?

[PAH]

.. if the people cannot afford Nuts - let them eat cake

His Excellence Pope Blairus 1st

As long as they don't ask for fruity nut cake.

Maybe if they didn't fly in most of the food from other countries the prices would be lower.

I know they're just exploiting cheaper labour abroad, but if demechanisation continues, we'll be seeing more people (like those in Egypt) living in rubbish dumps manually sorting recyclable stuff to earn their keep.

[AlfredJPruffock]

.. if the people cannot afford Nuts - let them eat cake

His Excellence Pope Blairus 1st

[AtW]

Producer prices at 16-year-high

The soaring cost of food is being passed on down the supply chain
Price inflation of goods leaving UK factories has reached its highest rate in 16 years, driven higher by petrol and food costs, official figures show.

Annual output price inflation reached 5.7% in January, up from 5% the previous month, according to the Office for National Statistics (ONS).

Prices paid by factories for their raw materials surged by 18.7% in the 12 months to the end of January.

Analysts said this could hold back the Bank of England from further rate cuts.

[These figures] will likely send blood pressures higher at the Bank of England
Howard Archer, UK economist, Global Insight.

Core output price inflation, which strips out the effects of food and petrol, also rose much faster than expected, up 0.8% on the month, the fastest since records began in 1986, and was up 3.2% year-on-year.

'Awful' figures

"The January producer price inflation is really horrible and will likely send blood pressures higher at the Bank of England", said Howard Archer, UK economist at Global Insight.

"[They] further limit the scope of the Bank to cut interest rates aggressively to try and reduce the danger of a sharp economic downturn over the coming months."

As well as higher oil and wheat prices, the fall in the value of the pound in recent months pushed up the cost of other raw materials.

The Bank of England had been hoping that the rise in oil prices would be a one-off shock whose effects would gradually wear off during 2008.

"We had been expecting a further increase in output price inflation but these figures are unequivocally awful," said Philip Shaw, an economist at Investec.

'Inflationary pressures'

The Bank's rate-setting Monetary Policy Committee reduced the key UK interest rate from 5.5% to 5.25% last week amid signs that the economy is slowing.

Forecasters suggest that in 2008 the UK economy will experience its slowest rate of growth for 15 years.

And house prices are also expected to slow dramatically, with signs that mortgage lenders are tightening up on credit conditions.

But the rising prices will alert the Bank's policymakers to the increase of inflationary risks - which could translate into higher wage demands.

The Bank aims to hit the government's consumer price inflation target of 2% and signs of rising factory gate inflation will make it tougher for it to justify further rate cuts, despite the slowing economy.

Meanwhile, the scope for fiscal stimulus seems limited.

The Institute for Fiscal Studies has warned that the government needs to raise taxes by £8bn to meet its fiscal targets over the next two years, after running a large budget deficit during the boom years.

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Nuts prices effectively doubled