News Items Today

As pressure mounts, the stock market takes a right hammering once again, along with the Far East and New York. Drastic emergency measures are called for and the Federal Reserve’s hand is being forced to cut the interest rate to just 1 percent. This action is crucial and could happen as soon as tomorrow. Following the recent cut in the interest rate on October the 8th, Gordon Brown is now mulling over what to do next.

There is to be a meeting of the MPC (Monetary Policy Committee) next week, but feelings are that an emergency session will be held as soon as. “They need to act very quickly to get ahead of the curve. The time has arrived to deliver positive surprises; it is psychological warfare “, Sushil Wadhwani a former member of the MPC is quoted as saying.

The emergency meeting would tie in with the European Central Bank and New York. Desperate times need desperate measures and it would also lift the mood of the country. The global downturn has taken its toll and we are now ‘in’ a recession according to the new GDP (Gross Domestic Product) figures. ‘Gross Domestic Product (GDP) is an integral part of the UK national accounts and provides a measure of the total economic activity in a region. GDP is often referred to as one of the main ’summary indicators’ of economic activity and references to ‘growth in the economy’ are quoting the growth in GDP during the latest quarter’.

The only saving grace to come out of this crisis is that house prices will plummet by 25 per cent by the year 2010 it is forecast. House prices fell 1.3 per cent in the turbulent month we have just been through, making an overall seven per cent decrease in the last year. Debit cards will be seen to take over from the credit card market analysts predict, as people watch their pennies very closely as the recession takes hold…

The credit crunch is already showing signs that people are eating healthier food. There are far less takeaways being bought, and people are making packed lunches to take to work with them. Many people are cycling or walking to work also. I think restaurants and takeaways will really feel the pinch, as people cut down drastically on their weekly food bill, and expensive nights out will just have to take a back seat. We as a nation are eating less; drinking less and smoking less, recent figures have shown. When the chips are down we do what we have to do.

Gordon Brown is quoted as saying yesterday on BBC’s Scotland Politics Show, ‘We could have dealt with some of these problems if we’d known what was happening in the sub-prime market in the States but we didn’t have the global early warning system’. - Not good enough I’m afraid! I think the fact that last year what was happening in Boston should have been early warning sign enough. The housing market collapse affected Boston dramatically in all sectors. I wrote the following article last year and sensed something very ominous was brewing then.-

- Despite all the doom and gloom of recent weeks, Gordon Brown is expected to announce today that welfare reform will be increased. The PM said, ‘This is not the time to be slowing down welfare reform’. So hold onto your hats and your purses because we are in for a very bumpy ride. -

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- A LOOK AT RISING GROCERY PRICES IN THE BOSTON AREA-

- An Urgent Issue -

This is a very important and emotive issue in Boston today. With the massive incline in energy costs, compounded with wages at a standstill, the housing market collapse has a lot to answer for. The staple diet of the native Boston citizen has been put under huge pressure with the soaring prices of daily foods. Items such as bread, milk, flour and eggs which are basic dietary requirements have catapulted sky high this year, according to the latest data from the Federal Bureau of Labor Statistics.

Egg prices increased by a staggering 40%, while the cost of milk lagged not too far behind at an increase of 26%. Eggs rose by a massive 60%. Pasta products increased by 30%, and fruit and vegetables seemed low in comparison with a 20% increase. With these major increases in food prices, the strain is beginning to take its toll. As one Boston retailer Laura Sens of BJ’s Wholesale Club is reported to have said “No retailer can absorb increases indefinitely. Given what we are seeing, all retailers have to raise prices, and are doing so.”

So what we have here in Boston is a Catch 22′ situation. One precipitates the other, and as gas prices soar, so will grocery prices, leaving the Boston resident reeling with the already massive increase to their grocery bill. One Portsmouth resident Amy Bringer said that her weekly grocery bill has increased from $125 to $200 over the last year, and the frightening prospect is the fact that analysts expect these prices to keep on rising.

There is a huge upward trend to the price of groceries in the Boston area, and they continue to rise. The whole food industry is being put in a position where it has to charge more for daily produce. With the average household spending three times on food to what they spend on gas, and with the present economic food crisis Boston looks set for a drought. Never have they seen such an increase in the price of food since 2003, and supermarket checkouts are feeling the buyer’s wrath.

Commodities analysis firm DTN, reports that in the past two years, prices for corn have doubled, soybean prices have tripled, and wheat prices have more than tripled due to the poor harvesting conditions. This present situation in Boston and beyond, isn’t a case of greedy retailers heaping on their profit, but more a case of the present economic situation, and the price of the dollar combined with the increased price of oil, and because of this production and transportation costs have risen in proportion to the oil increase.

Grocery stores in Boston, such as Meridian Food Markets, Shaws Supermarkets, and Wholesale Foods Markets, are being hit hard by their suppliers, and in return they are feeling the wrath from their customers, and so cause and effect comes into play within the food chain.

Therefore all of this has had a knock on effect, and the consumer is left feeling the final effect. Knowing what has caused the increase in food prices doesn’t help the shopper in the aisles wondering how they are going to make ends meet, but it does help to know what has caused this situation. Understanding goes part way to accepting, and while we can do nothing about the increased prices to the groceries in Boston today, we can take stock, and try and budget accordingly until the over inflated food prices settle to a more acceptable level.-

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