By using this site, you agree to the Privacy Policy and Terms of Use.
Accept
IndebtaIndebta
  • Home
  • News
  • Banking
  • Credit Cards
  • Loans
  • Mortgage
  • Investing
  • Markets
    • Stocks
    • Commodities
    • Crypto
    • Forex
  • Videos
  • More
    • Finance
    • Dept Management
    • Small Business
Notification Show More
Aa
IndebtaIndebta
Aa
  • Banking
  • Credit Cards
  • Loans
  • Dept Management
  • Mortgage
  • Markets
  • Investing
  • Small Business
  • Videos
  • Home
  • News
  • Banking
  • Credit Cards
  • Loans
  • Mortgage
  • Investing
  • Markets
    • Stocks
    • Commodities
    • Crypto
    • Forex
  • Videos
  • More
    • Finance
    • Dept Management
    • Small Business
Follow US
Indebta > Investing > Sunak’s Latest Inflation Plan To Take Britain Back To The 1970s
Investing

Sunak’s Latest Inflation Plan To Take Britain Back To The 1970s

News Room
Last updated: 2023/05/31 at 11:11 AM
By News Room
Share
3 Min Read
SHARE

Just when we thought Britain’s economic policy couldn’t get more bizarre, up pops an announcement from Rishi Sunak, the United Kingdom’s Prime Minister.

Contents
A Response to Stubborn InflationDark Price Control History

Earlier in May, news broke that Sunak would pressure supermarkets to offer basic food staples such as milk, bread and butter at the lowest possible prices, according to multiple reports.

The phrase used by Britain’s media is “price caps” and everyone in the UK should be concerned as it represents a return to failed 1970s economic policies.

A Response to Stubborn Inflation

Sunak’s effort is the latest attempt by the government to fight the country’s stubborn inflationary surge. Inflation has come down but key items keep rising at a frustrating rate and have led to mass industrial action by some of the country’s many unions.

Inflation hit a recent low of 8.7% last month down from 11.1% in October, according to data collated by TradingEconomics.

However, food inflation registered at an eye-watering 19.3% in April down from 19.6% in March.

Clearly such levels of inflation will hurt lower-income households disproportionately hard. And that’s something no government wants. And, in that respect, the government’s sentiment is worthy.

Dark Price Control History

However, there are better ways to tackle inflation than caps on prices. The route that the Sunak government is pointing to will, in all probability, be a disaster based on the UK’s history of using almost identical policies under the name of “price controls.”

Economic theory and history show that price caps tend to lead to shortages, meaning that at government-mandated prices don’t solve the financial problem. They simply move it to somewhere else. Typically, that would mean black market trading in essential goods and the well-connected getting first dibs on critical items.

During much of the 30 years after WWII, Britain’s politicians left-leaning and right-leaning alike, experimented with price controls. However, they did little if anything to subdue inflation, according to a 1976-dated report from the Canadian-based Fraser Institute.

In fact, in the three decades after the war, inflation was typically higher than during the periods of no controls, the Fraser research shows. In other words, the price controls worked backward, pushing inflation higher rather than crushing it.

The goal of calming inflation, which Sunak wants from “price caps,” likely won’t materialize. What’s needed is something different.

Read the full article here

News Room May 31, 2023 May 31, 2023
Share this Article
Facebook Twitter Copy Link Print
Leave a comment Leave a comment

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

Finance Weekly Newsletter

Join now for the latest news, tips, and analysis about personal finance, credit cards, dept management, and many more from our experts.
Join Now
Why Saudi Arabia raised oil output before Israel’s attack on Iran

Unlock the White House Watch newsletter for freeYour guide to what Trump’s…

Israel-Iran latest: Iran and Israel exchange fresh strikes as conflict escalates

Iran’s Revolutionary Guards have threatened “more forceful and expansive” attacks against Israel…

Bond market braces for potential summer turbulence

Watch full video on YouTube

Has Gap Done The Impossible?

Watch full video on YouTube

Two Alternatives For A Potential $5,000 Monthly Income

This article was written byFollowFinancially Free Investor is a financial writer with…

- Advertisement -
Ad imageAd image

You Might Also Like

Investing

Nursing Home Stocks Could Suffer from this Medicaid Spending Remedy

By News Room
Investing

Bitcoin Drops Below $90,000 Again. What Could Move It Next.

By News Room
Investing

These Stocks Are Moving the Most Today: Marvell, Nvidia, Broadcom, GM, Tesla, MongoDB, Burlington, and More

By News Room
Investing

Nvidia Stock Falls as Marvell Earnings Compound AI Gloom. The Rising Risks for Chips.

By News Room
Investing

This analyst says Tesla deliveries will be 16% below expectations. Musk is part of the problem.

By News Room
Investing

BP CEO was awarded no bonus pay from oil giant’s financial performance

By News Room
Investing

Shares of Starlink’s European competitor have tripled. CEO says it can do the job in Ukraine.

By News Room
Investing

GE Vernova Stock Rises as Analyst Flips to Upgrade After Rating Cut

By News Room
Facebook Twitter Pinterest Youtube Instagram
Company
  • Privacy Policy
  • Terms & Conditions
  • Press Release
  • Contact
  • Advertisement
More Info
  • Newsletter
  • Market Data
  • Credit Cards
  • Videos

Sign Up For Free

Subscribe to our newsletter and don't miss out on our programs, webinars and trainings.

I have read and agree to the terms & conditions
Join Community

2023 © Indepta.com. All Rights Reserved.

Welcome Back!

Sign in to your account

Lost your password?