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!

Comment

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?