According to the British Retail Consortium, non-food retail prices actually fell last month driven by discounting.
So, we are seeing the very real impact of the squeeze on household financing driven by BoE policy.
While food prices seem unlikely to drop for climate & supply reasons, across non-food markets its the potential start of a period of deflation... an 'overshoot' by the BoE that will be hidden in 'headline' inflation but will still be a serious economic problem.
La Banque du Japon relève ses taux, et c’est historique
La Banque centrale japonaise a relevé ses taux pour la première fois depuis 2007 et sort des taux négatifs qu’elle maintenait depuis 2016. Une volonté de construire un récit de sortie de la #déflation qui reste encore incertain.
Chinas Wachstumspläne: Große Ziele, große Probleme
China hat sich stark gewandelt, aber Pleiten im Immobiliensektor, schwache Exportnachfrage und Kaufzurückhaltung in der Bevölkerung machen der Wirtschaft zu schaffen. Kann das Land sein Wachstumsziel für 2024 erreichen? Von Thomas Spinnler.
La Chine menace le monde d’une guerre des prix industriels
Alors que les économies occidentales souffrent encore des effets de l’#inflation, Pékin s’enfonce dans la #déflation et menace d’exporter sa surproduction vers le reste du monde dans une guerre des #prix.
Verbraucherpreise sinken: China kämpft gegen die Deflation
Die Preise in China sind so stark zurückgegangen wie zuletzt während der Finanzkrise vor 15 Jahren. Ein dauerhaft sinkendes Preisniveau kann Experten zufolge großen wirtschaftlichen Schaden anrichten.
Eine anhaltende Deflation und ein sich nur langsamer erholender Außenhandel zeigen die Belastungen der chinesischen Wirtschaft. Sie leidet unter der schwelende Immobilienkrise, dem schwachen Konsum und geopolitische Spannungen. Von E. Lamby-Schmitt.
Given that changes in #interestrates policy take around 12 months to work their way through the system, and that the BoE seems keen to force a #recession and/or #deflation to 'discipline' #workers trying to bring their real wages back to level now not seen for over a decade... the Q. is:
How long is the recession they are engineering going to last?
You'll be able to tell by when they start to change policy; if they wait until the recession has actually started then they want it to last a year
At the far end (for many goods) in #China, there is currently ongoing #deflation in factory gate prices;
But, at least presently, it would seem that #profits at various stages in supply chains (as well as regulatory costs inc. #taxes), are swallowing up any extra margin(s) that might be caused by such deflation.
So, it real wages are lagging #inflation, taxes are stable & its not the Chinese suppliers, whose pushing up prices?
What's happening in #China wrt #deflation is pretty simple: people there were using the housing market as a replacement for banks assuming that prices will always continue to go up. They didn't, and now they're poorer, so they're holding on to their remaining cash. Hence deflation. How do you correct this when the property market makes up a third of China's wealth? Absolutely nuts! #economics
China's consumer sector fell into deflation and factory-gate prices extended declines in July, as the world's second-largest economy struggled to revive demand and pressure mounted on Beijing to release more direct policy stimulus.
Konjunkturflaute: Chinas Wirtschaft rutscht in die Deflation
Die Verbraucherpreise in China sind im Juli gesunken. Damit ist es nun zur Deflation gekommen. Setzt sich die Abwärtsspirale der Preise fort, könnte das verheerende Folgen für die Wirtschaft haben.
Westliche Notenbanken kämpfen gegen die hartnäckige Inflation. In China wachsen dagegen Sorgen, dass es zur Deflation kommen könnte - einer möglicherweise gefährlichen Abwärtsspirale fallender Preise.
For those of you who've been following the debates (in my timeline & elsewhere) on the Q. of #inflation, #greedflation, #profits & #interestrates, here's a nice summary from Prem Sikka of his views (which complement what I've been saying):
the roots of current inflationary problems are in corporate enrichment not in any (mythical) wage-prices spiral;
China tips into deflation as efforts to stoke recovery falter (www.reuters.com)
China's consumer sector fell into deflation and factory-gate prices extended declines in July, as the world's second-largest economy struggled to revive demand and pressure mounted on Beijing to release more direct policy stimulus.