The Brexit Breakfast saga

Yesterday saw quite an extraordinary missive from the offices of KPMG that combined economics and an insight into the apparent habits of staff at that organisation. It led to some debate and indeed some humour so let us take a look. From the Guardian.

Brexit breaks breakfast? Hard Brexit could mean hard luck for fry-up fans…….Shoppers would be forced to pay £3 more for a traditional British fry-up if the government fails to secure a trade deal with the EU, piling more pressure on already cash-strapped consumers.

That is a bit of a shock is it not as it implies such a breakfast would be £3 more each which seems rather extreme. Of course some products have risen in price already due to the lower value for the UK Pound £ as the UK imports quite a bit of the food it consumes.

Here is how Bloomberg released this.

The price attracted my attention so I enquired if they only ate in five-star hotels? It quickly turned out that I wasn’t the only one.

let’s just say I enjoyed a full English last week £7.50. Same price as a year ago at my same local coastal cafe. ( @mhewson_CMC )


Read this (and its comments) with your breakfast. £5 here at Totnes Waterside (  @RSR108 )


Tesco all you can eat £4,95 KPMG making a real dogs dinner of their analysis. No doubt you can get cheaper elsewhere ( @BarrattPeter )

The analysis stated that the ingredients came from the mid-range of a UK supermarket although some were not convinced.

“KPMG UK analysed the cost of mid-range ingredients of a fry-up from a leading UK supermarket” where…Fortnum and Mason??! ( @maximbroking )

I am not sure if the Guardian re wrote their article but anyway it now states that this was for a family breakfast, something missing from the original Bloomberg article. The debate then shifted to the choice of ingredients with the choice of olive oil to the fore.

Somewhere that cooks its breakfasts in a litre of olive oil? ( @dsquaredigest)

I have to confess I was beginning to feel a little queasy especially as it turned out that some might do this albeit if course we do not know what oil was used here.

I used to have a friend who did their fryups in about two inches depth of fat…utterly inedible! ( @MattBrookes3 )

There were some alternative suggestions for the use of olive oil.

You don’t cook in it, you barbarian. You wash down your meal with a couple of pints of it. ( @Birdyworld)

One Bloomberg journalist did appear willing to give it a go.

As I mulled the list I was curious about the addition of French butter to the list for two reasons as what I buy is mostly UK butter and of course French butter is usually unsalted giving a very different taste. I wasn’t the only one it would seem.

Welsh butter with mine please boyo ( @putt1ck )


I’m remain/internationalist but I always buy UK for my fry up, I don’t think these calcs will effect me? PS toss the oil, use butter! ( @LukeMcElligott )

Some took this a stage further.

I find Swiss organic grass-fed butter goes better with baked beans………but only ever fair-trade Himalayan Yak butter with my Japanese Kotoka Strawberry jam. Obviously, ( @WEAYL )

The issue of strawberry jam got a mention.

and who puts strawberry jam on their fry-up!? ( @ChrisB_IG )

Although hope springs eternal for one Bloomberg customer.

Bacon=NL,bread=local,Cherry vine tomato=Spain/NL/or Kent UK 😉 Strawberry jam= free with Bloomburg subscription (I would hope) ( @Svedenmacher )

We did discover someone keen on French butter albeit for a modern reason.

I often buy President butter, especially lately … to piss off the Brexiteers ;). ( @ClausVistensen )

Thus we found quite a bit of debate over the ingredients which then seemed to be reflected off Bloomberg Towers.

Also there’s no ketchup or hash browns. The moral of this story is don’t go for breakfast at KPMG ( @Lucy_meakin )

Considering the cost some were unhappy with the quality.

Funny looking sausage anyway. I think I’ll give it a miss. ( @PaulKingsley16 )

As ever some were hoping for a bright side to the issue.

Does anyone know if KPMG have vacancies for analysts economists researchers -will come out of retirement for their hourly Breakfast rates. ( @BarrattPeter)

Whereas the other side of the atlantic felt we needed to widen our perspective somewhat.

You Europeans are so dense. It’s the labor cost component of the typical Chinese household cook that’s driving up breakfast costs. ( @EquityTrader44 ).

Still it could all have been much worse. Imagine this for breakfast or anything really.

Another salvo in the war on cash

There is much to consider in the report on the gig economy by Matthew Taylor today but one bit in particular caught my eye.

The author of a government review into work practices would like to see an end to the “cash-in-hand economy”.

Matthew Taylor, whose report is out on Tuesday, said cash jobs such as window cleaning and decorating were worth up to £6bn a year, much of it untaxed.

Although he wants to present it as progress.

Mr Taylor also said he did not want to ban cash payments outright, but hoped, over time, the increasing popularity of transaction platforms such as PayPal and Worldpay would see a shift from cash-in-hand work.

“In a few years time as we move to a more cashless economy, self-employed people would be paid cashlessly – like your window cleaner. At the same time they can pay taxes and save for their pension,” he said.

This has many of the features of so-called blue sky thinking reports. In itself the cash in hand economy is hard to defend because tax is not paid and it is therefore unfair on those who pay taxes on income. However his effort to claim it would benefit the workers is risible “they can pay taxes and save for their pension.” From a magic money tree? Also it is hard not to think that the establishment wanted this review as part of an effort to raise more tax like the Chancellor’s attempt to increase National Insurance on the self-employed of a fee months ago. If they cannot make a relatively minor change without a fast U-Turn how exactly will they tax these workers?

But we have a theme of more tax being paid which will please the establishment and another feature these days which is of things being leaked before they are announced properly. Why not wait a few hours? It is all about expectations management which moves me to my  main point which is that the establishment seems ever more desperate to get rid of cash.

You would think that it is one of the barriers to them introducing negative interest-rates in the future……Oh hang on!


Economic life is often much more complicated than it first appears as for example we are on the road to more electronic payments. Over the past few years I have found myself paying for things with a card that would have been unthinkable before. Yet this is also true . From the Bank of England.

Despite speculation to the contrary, the number of banknotes in circulation is increasing. During 2016, growth in the value of Bank of England notes was 10%, double its average growth rate over the past decade.

Evidence of stockpiling?

As to the breakfast saga there are a few bits to consider. The first is the British obsession with a fry-up which goes in hot pursuit of our obsession with tea. Although apparently not the latter at KPMG who drink coffee. Next we have the click bait effort of claiming breakfast would cost £26.61 where even the family addition from the Guardian does not work unless you use all of the olive oil ( I am getting queasy again) and drink several gallons of coffee with slabs of butter.

Meanwhile there are issues one of which is a regular theme of mine which is that we import so much food in the UK and could do much better on that front. Some things we cannot grow (oranges) but some we can. Actually KPMG seems unaware of what we do produce as apparently we grow a lot of mushrooms. Of course we could end up paying higher tariffs for some products as we seem to have become rather dependent on Danish bacon. But for other products such as olive oil ( assuming you use it) Europe is not the only source and transport costs are often low.

Could the Bank of England step in with some Sledgehammer Breakfast QE?



37 thoughts on “The Brexit Breakfast saga

  1. Really appalling presentation of statistics; a good case study in how to confuse people and completely fail to get your point across. Of course it’s obvious that the cost of the actual breakfast will hardly increase at all, despite the apocalyptic headline.

    I used to work for the consultancy part of KPMG in London and I’m not sure we’d have made the same mistake.

    • Hi Bob J

      I am sure that it was always true that such things wanted to catch the headlines. But these days organisations seem to be more willing to post “research” that falls apart upon even the most cursory examination.

    • Some of the attempts are so flagrant…

      The people want cheaper housing and higher wages.As I tried to explain to my family who seem obsessed with saying everyone voted Brexit because of a spurious statistic spouted by politicians about the NHS.

      • I know that politics is banned on this blog, but it is really interesting how remainers are blaming everything (house prices and wages especially) on Brexit when
        1. We are still in the EU last time I checked
        2. QE must have much more to do with asset bubbles and house prices
        3. The USA seems to have many of the same issues in terms of stagnant wages/ unaffordable houses, but (unless I have missed something), it is not in the EU.
        4. Exactly the same issues are afflicting many countries in the EU (and Eurozone), with static wages and asset bubbles, as Shaun has pointed out on this blog.
        On house prices, irrespective of your views on immigration in other aspects, the 3.2 million EU citizens in the UK must be living somewhere and creating demand for property.

  2. If imported bacon becomes too expensive then surely this will be good for British pig farmers or doesn’t it work like that any more??? … maybe Brits can no longer breed pigs or slice them into thin pieces without the EU showing us how, who knows.

    I’m a contractor and i’ve been listening to this Blairite gravy train bloke talk about his report and how the govt are going to be fixing our rights by getting companies to pay NI for us. In other words how to get more tax directly to the govt.

    Can but help thinking they’ll make contracting even more unviable. Friend of mine used to hire labourers and paid them a relatively decent day rate up knowing that at the end of the job there’d be no more work for them this was up until about 10-15 yrs ago. Then endless rules and regulations came in making it such a headache taking them on he had to go via the agency route and employ the same people via these parasites.

    So now he pays the agent what was their old wage,and they take a cut and pay these labourers minimum wage … and at the end of the job they still get bumped.

    Govt really ought to stop helping.

    • ‘If imported bacon becomes too expensive then surely this will be good for British pig farmers or doesn’t it work like that any more???’

      You’re not grasping the basics of Central banking are you?

      • Perhaps we should call pork farmers “Piggy banks” and then they would be rescued/subsidised and generally treated well by the BoE 🙂

    • Did I read the words Blairite and gravy train in the same sentence? What a cheap jibe at our underpaid and overworked politicians. I am sure that even Tony Blair himself just scrapes by on a state pension like the rest of us.

  3. What was it that President Reagan said was the most frightening phrase?
    “I am from the Government and I am here to help you”

  4. What they’re saying is that we need to stay in the EU,have more QE (coz it works innit!),more ZIRP(or even NIRP) and HTB 3.

  5. This is your best blog ever – all the things wrong with ivory towers in one survey on breakfasts:
    The fact that they don’t even notice that £26.61 might seem excessive just sums it all up. To put it into context:
    1. For £2, you can buy a litre of Tesco brown sauce
    2. For £4, you can buy a kilo of butter at Tesco (I have just checked). What on earth are they going to do with it all?
    3. For £3.60, you can buy a litre of olive oil.
    4. For £2.50, you can buy 1.5 kilos of strawberry jam.
    I am not sure that even a family of six could get through that lot.
    I am not sure how many people have ever used olive oil and brown sauce in the same breakfast. Perhaps the olive oil is there to be drizzled over a ciabatta?
    I have come to two conclusions from this KPMG report:
    1. The author has never cooked breakfast;
    2. The author sends someone else out to do the shopping and does not notice whether there is any change.
    Hilarious, just hilarious that KPMG paid someone for this.

    • Hi James

      I agree that this is ill thought out on so may levels. I am someone who likes bread and butter and from time to time will have a sandwich with just that. But even a family like me would take a very long period of time and a vast number of breakfasts to get through the amount indicated.

      If you have a full fry up then the idea of strawberry jam presumably on toast seems a little bizarre to say the least. A strong stomach would be required.

      I guess being relatively cheap the section on baked beans must have been annoying for them.

  6. As an example of their costing and accounting skills, if I was looking for some accountants to audit my accounts, they would now be off the short list. When signing the accounts off as a director or secretary you have to have confidence in what they have prepared is ‘a true statement of the financial position of the company’!

    There are currently plenty of major concerns over the financial costs of #Brexit in terms of trade logistics, but the cost of a fry up is not one of them. Import/export customs logistics between UK/EU are a real concern as any big delays and added costs will potentially hit both parties hard. This could potentially have much bigger costs than a ‘no deal’ and reverting to WTO tariffs.

    The UK where the EU is 40% of our export market and EU where they export much more in goods to us than we do to them. Trucks queuing half way across the UK and half way across Europe for the Dover-Calais crossing is a very real possibility if both sides don’t have this running smoothly by March 2019.

    • I had the unfortunate (but enlightening) experience of being delayed in Calais last week and spent a couple of hours watching the thousands and thousands of trucks rolling onto the ferries bound for the UK. Any EU politician who interfered with this flow of goods to the UK market would be out of a job rather quickly. Davis and his team should spend a couple of hours watching it themselves and they would soon realise that the EU is bluffing. They need our contributions and they need us to keep buying from them. The consequences of messing up the trade flow would be enormous and political heads would roll within the EU.

      • Both sides haven’t had to do this since the implementation of the Single Market in 1991. Now both have got to buy/allocate the land, design, get planning permission and build the facilities, setup and integrate the IT systems and recruit, train and manage the staff. For the transition to work smoothly IMO trials will need to start at least 3 months before the March 2019 deadline with the percentage going through the new systems ramping up to 100% by the transition date.

        I hope you are right but you have a much higher faith in Government’s and public servants than I have for this all to run smoothly and glitch-free.

      • On the basis we are looking to trade freely with the rest of the world the flow of these EU trucks will inevitably slow down.

        Hence why the French & Germans don’t like it

      • Don’t bet on it. In trade negotiations, might is right (even when it’s unfair and wrong) In short a no deal scenario has a much higher percentage impact on the UK exports than the rest of the EU. UK can sure buy food from down under, but exporting cars ? Australia has hefty import tariffs, and you need to compete with Japanese manufacturers selling in NZ. Good luck !

        As for heads rolling, Merkel, Trichet, Lagarde, Strauss-Kahn, Sarkozy and others are all guilty of cross border bailout treaty violation. None of them have been punished for it

        • Yes but a no deal scenario has a far greater impact on Germany than the UK.

          Break down where the trade deficits are.

        • I’ve got some bad news for you. The UK’s “strong and stable” May isn’t doing a deal with Germany’s pragmatic Merkel. The UK is trying to do a deal with the EU other 27 and their vetoes.

          The Canada EU trade deal negotiations were started in 2009 (according to wikipedia) Treaties were concluded in 2016. Czechia, Romania and Bulgaria refused to ratify until Canada lifted visa requirements. That trade deal is still not ratified. Any country can refuse to ratify to gain some special interest or just gain more EU funding. Even regional Belgian parliaments can veto it.

          8 years later, Canada still hasn’t concluded a deal.

          In short, any deal is likely to take a long time, and cost the UK more than EU membership. you can kiss the CAP rebate goodbye. I have zero confidence in the Tory Brexit team’s ability to get a good deal.

  7. For all the talk of a cashless society, politicians seem to forget the ingenuity of people. Ban cash? Can I transfer my cash into another country’s currency (dollars anyone). No other country has cash? Gold/Silver/Bronze discs anyone… we’ll treat them like money 😀

    • Hi Russ and welcome to my corner of the web.

      Yes there have been plenty of efforts over time. After all much of the cause of the English Civil War was tax demands from the King and his government. It was perhaps forever thus and as you say people can be very inventive with the necessary motivation.

  8. Maybe they assume that one is in a bit of a rush after cooking such a huge breakfast and do not have time to shower and use the olive oil and a strigil as a quick alternative?

    having lived in Greece for many years we get through a LOT of olive oil but this amount would defeat even me.

  9. The article doesn’t surprise anyone on this site I hope, another attempt to frighten the sheeple, they tried the “house prices will crash” in the run up to the BREXIT vote, that didn’t work, and now they think”oh what do poor working class people value next to their house price, ideas anyone,,,,,yes Tristram … English Breakfast….ooooh yes good one, Spanish Holiday if the pound collapses…. nice one Drusilla, ….hmmmm…. we’re struggling now, they really haven’t got much purchasing power beyond their football season tickets, Saturday night Tikka Massalla and their Sky subscriptions have they? and they aren’t dependant on the Eu negotiations so we’ll wrap it up here shall we? Let’s just see how Theresa and David sell the BREXIT sellout and then we’ll reconvene shortly afterwards what?

    As a PS, here ooop North of Watford, a full English (and all you can eat) is just 4.29 of your soon to be worthless English pounds at any Toby Carvery, top quality as well.

    • Kevin I agree,this report is a hang-over or sleeper cell from DC and GO’s threat fest. Maybe there is to be resurgence of pro-EU attacks on the mainland. Personally though I don’t see the Brexit going through, Govt is not capable of achieving anything other than a steady decline in pretty much every fair measure.

  10. ““In a few years time as we move to a more cashless economy, self-employed people would be paid cashlessly – like your window cleaner. At the same time they can pay taxes and save for their pension”

    This is utterly mystifying, particularly the part about pensions. Can anyone explain to me what the intended idea here was, please?

    People can declare their earnings for taxation whether it’s in cash or not. Under-declaration may be a more risky strategy if earnings are received electronically, so I can see that someone out to maximise the tax take may pursue a war on cash, but small businesses are expected (legally required, even) to keep adequate records, so that it should not matter whether payments are cash or electronic. The way this is being written suggests that forcing small businesses to take electronic payments only is somehow doing them a favour, when cash may often be more convenient and incur lower costs!

    And then we discover that if you are paid in cash, you somehow can’t save or get a pension? What even is the idea here? That the world is divided into “cash people” and “electronic people”, and the “cash people” are doomed to some life of squalor because – only being able to receive and pay in physical currency – they can only do business with other primitives, purchasing small consumer goods and everyday shopping while any surplus savings must be stored under their beds, but are incapable of transacting at all with the more sophisticated “electronic people” and obtaining their fancy consumer and financial products. New cars, a house, a mortgage, a pension … all beyond the reach of the thick old casho, no matter how fat a wad of notes he or she has acquired. Meanwhile, the caste of electronicas, their PAYE salaries wired to their database records as if by magic through the digital ether, use their advanced “bank accounts” and “credit cards” and other feats of computer numerology to execute clever financial strategies and plan for their futures, with no pre-Victorian paper or polymer or alloy involved.

    If only there were some way for a casho to take a physical twenty pound note, and perform some alchemical jiggerypokery to it, and end up with twenty pounds credited to an electronic account in their name. They too could access the wonderful world of twenty-first century banking and financial services. Perhaps such a way existed once, when folklore says there were still “bank branches” on “high streets”. If wild rumours are to believed then maybe such methods exist yet unto the present day, but anybody with such sub-neanderthal intelligence as a window-cleaner or gardener hairdresser or handyman or music teacher or A-level tutor can hardly be expected to figure that out for themselves, or entrusted to walk to the bank for themselves without falling down a manhole or bumping into a lamppost or getting mugged or eating their notes en route, and certainly communicating their intention to the bank cashier in spoken English is likely to prove far beyond them. A much better idea, for their own sakes, to abolish the main medium through which they get paid. They’ll like that, it’ll be good for them, the poor dears.

    • In fact they are going to love it, so much, that their first thoughts will unanimously be “WOW THIS IS SO GREAT THAT I’M NOT GETTING PAID ANY MORE, I SHOULD START PUTTING MONEY INTO THAT NEW-FANGLED PENSION PLAN IMMEDIATELY!!”

      • Hi MyBurningEars

        It is as James observed earlier an example of Ivory Tower syndrome. Any such individual will of course be poorer after paying tax and will have less money to pay anything into a pension. But in the Ivory Tower world less is more apparently…

        • That reply from James was cracking. I have read your blog for many years (before, during and after its sojourn to mindfulmoney, though I think I’ve only been moved to comment 3 or 4 times) and I think this is one of your best-ever posts.

          I’d have thought even from the theoretical point of view one attains gazing down from the Ivory Towers, that the madness is clear. One of the most elementary, albeit abstract, things one first learns on an economics course is that the optimal result that can be obtained given a set of options will not be improved, and may become worse, if an agent is restricted to choosing from only a subset of those options.

          Small businesses can currently choose from {cash, epayment} as their means of payment for each transaction; if they choose cash, it is not because they are idiots but because they perceive a certain advantage to it (e.g. lower likelihood of being defrauded). Presenting them with the Hobson’s “choice” {epayment} cannot possibly make them better off – at best, they may be no worse off than before, but only if they were utterly indifferent between cash and epayments (unlikely – what are the chances that the pros and cons of each method are so arrayed that, like Buridan’s Ass, we stand exactly at the half-way point?) or if they felt the benefits of epayments were greater for every transaction, so they never used cash anyway (whereas the fact they do is precisely what the report is bemoaning!).

          What gets my goat is that the facade this is all somehow being suggested as a favour for the self-employed. If the report had minced no words – small businesspeople are morally dishonest, tax-dodging, NHS-plundering, austerity-causing scum, it’s time for us honest folk to abolish cash and make them pay their fair share – then one could argue with the veracity of the premise, and whether the means were disproportionately costly for the ends, but at least some veneer of logical coherence could be sustained!

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