What is inflation doing to your Christmas dinner?
Will the cost of your dinner plate have you proclaiming ‘Bah humbug!’ this Christmas?
At the end of A Christmas Carol, Scrooge famously buys the Cratchit family a prize turkey. Turkeys were expensive in Victorian England, and a more exclusive choice than goose. The gift is a marker of his newfound generosity.
But would Scrooge be so generous today?
Dickens wrote A Christmas Carol during a period of deflation. Prices had been falling for the four years that preceded its publication.
Meanwhile this year, the price of a frozen turkey is up 7%. Christmas pudding is 5% more expensive than last year and gravy granules are up 3%.
And if you begrudged sprouts a place on the plate last year, their 5% price increase is unlikely to fill you with festive cheer.
Source: Kantar and the Guardian as of 9 December 2021. Items in detail: small frozen whole turkey, one cauliflower, 300g Christmas pudding, 500g prepacked sprouts, 250g gravy granules, one bottle of sparkling wine, one jar of cranberry sauce, 2.5kg of prepacked old potatoes, 500g prepacked parsnips, 500g prepacked carrots.
What’s driving inflation?
As you gobble gobble your turkey, contemplate the economic backdrop that is driving these prices.
The coronavirus pandemic has created a perfect storm of inflationary pressure.
What began with rising commodity prices has spread through the supply chain. It’s now creeping into our Christmas stockings and onto our dinner plates too.
Government stimulus packages, supply bottlenecks, the uptick in economic activity and pent-up demand have all played a role.
As turkey bears the brunt, the question for many is: how will inflation hawks respond?
Our investment experts regularly address questions like this on the inflation hub. Click below to browse our latest updates.
Count down to Christmas with our festive charts as we publish a new piece each day. Recognise the images that feature on our calendar windows? Each corresponds to a city where an Invesco office is based.
Related insights
Investment risks
-
The value of investments and any income will fluctuate (this may partly be the result of exchange rate fluctuations) and investors may not get back the full amount invested.
Important information
-
All data is provided as at the dates shown, sourced from Invesco unless otherwise stated.
When using an external link you will be leaving the Invesco website. Any views and opinions expressed subsequently are not those of Invesco.
This document is marketing material and is not intended as a recommendation to invest in any particular asset class, security or strategy. Regulatory requirements that require impartiality of investment/investment strategy recommendations are therefore not applicable nor are any prohibitions to trade before publication. The information provided is for illustrative purposes only, it should not be relied upon as recommendations to buy or sell securities.
Where individuals or the business have expressed opinions, they are based on current market conditions, they may differ from those of other investment professionals, they are subject to change without notice and are not to be construed as investment advice.
