Inflation set to hit

Which is to say, set to hit such that it won’t be ignored, for a change.

Hacking away at tariffs will only do so much. After continuing appreciation in the prices of grains and other primary foods, it looks like inflation is coming to supermarkets, for reezies.

In Chicago wheat and rice prices for delivery in March 2008 have jumped to an all-time record, soyabean prices are at a 34-year high and corn prices at an 11-year peak.

The increase of eurozone food price inflation to 4.3 per cent in November was one of the main reasons for the jump in the zone’s annual inflation rate from 2.6 per cent in October to 3.1 per cent, the highest in six years. In the US, annual food price inflation of 4.8 per cent in November contributed to a rise in the inflation rate to 4.3 per cent.

In the UK, food inflation was already running at an annual 5.1 per cent in October and analysts expect higher food prices to push overall inflation up in November. The UK figures are due to be published tomorrow.

In early trading on Monday, the new benchmark price of wheat for March delivery rose 30 cents to $10.09½ a bushel, more than 7.5 per cent higher than the expiring December contract of $9.39 and first time it has traded over $10 a bushel. The December contract expired on Friday and the March 2008 contract became the market’s benchmark on Monday.

Looks like its our turn. And just when it looked like people would manage to afford those mortgages, LIHEAP-less heating oil and the appreciation in gasoline prices that nobody has seen coming, yet.

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