Inflationary pressures

All good things have to come to an end. The benign environment where China and India delivered an ever more stunning array of goods at fabulous prices is changing into an era when Chinese and Indian demand puts substantial upward pressure on raw materials

Former Tory cabinet minister,John Redwood writing on his blog,which even if you don't agree with the politics is well worth a read.

In fact there are signs that the upwords pressure on inflation is continuing,rapid rises in fuel prices and food prices will make it increasingly difficult for the government to maintain its inflation targets thru this year.

As Redwood writes,it is difficult to understand exactly how the figures for inflation are calculated.Ask anyone in the street and all will maintain that their daily budgets are increasing.

What has kept inflation down is not the economic policy of the government but the globalisation of prices which has put pressure on Uk suppliers to fall into line.The phrase "rip off Britain" much used in the 1990's no longer really applies as the price of all goods and services have in real terms fallen.

Clothing is a prime example.The Primark effect has forced all major chains to reduce their prices.This has been done by driving down supplier costs and rationalising their own businesses.The detrimental effect in the UK has been to force companies to produce more with fewer staff.The consequence is that we are all working longer hours and are under greater work pressure.