Wednesday, 19 January 2011

Roll up, Roll up, Ride the Scary Rollercoaster!

Are you ready for the ride of your lifetime? In my case, my second inflationary spiral. Are you ready for the bumpy ride ahead?
Well, its happening: the inflation meter has finally stopped twitching and has started an inexorable rise.

Fuel was already on a steady climb from the middle of last year but the recent duty and VAT increases on top of inflation just sent it into a hockey-stick-like climb over the past month that global warmists would be proud of.

Prices are already increasing: especially food. The cafe where my daughter works are this week reviewing their prices, the local chippy (chippys always a good indicator of inflation I find) has increased their price by just over 8 percent. My wife does the shopping for the home she works at. Buying in such large quantities its easy to feel the effect of subtle price increases and lo and behold, prices appear to have increased by roughly 8 percent too.

So, although todays reports say that the CPI has gone up to 3.7 percent and the RPI up to 4.8, in the real world, we're still seeing inflation running just shy of 10 percent.

Once the VAT and Fuel duty rises feed into the supply chain, expect things to get a lot worse.

Anecdotal advice is reaching me of a large number of companies feeling the pinch. Drops in sales that haven't been seen for a decade are happening as punters, unsure of the future and shocked by a huge increase in their fuel bills start to hold onto money rather than spend it.

This is something far worse than post-Christmas blues. This is the start of something a lot bigger.

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