in Ukraine has increased the cost of both fertiliser and fuel prices, so the cost of growing and transporting food has increased, which forces the supplier to increase their costs and, therefore, supermarkets to increase theirs in line with these rises. If we take the UK as an example again, we can accuse the energy companies of making extreme profits in the face of an energy crisis, but again their costs have increased, and the UK was particularly impacted because their gas storage was woefully under-supplied and therefore the UK government was forced to buy more gas at higher prices to make up for this, which Furthermore, there may well be examples throughout the economy where some could rightfully be accused of raising prices too far to protect revenue impacted by the increasing inflation, and these should be examined and researched thoroughly. The stark reality is that issues throughout the world are driving inflation on the supplier side and that companies are unfortunately forced to raise prices in line with that to protect their profits. Suppose we take, for example, supermarkets, which are currently being accused of profiteering. Abnormal weather patterns have caused droughts which have impacted food growth. The war again drives profit for the company. You could therefore surmise that it’s not necessarily true that companies are taking advantage of inflation to increase profits. They are simply raising prices to protect their revenue and profits. And whilst we could certainly argue that there isn’t a need for them to protect record profits, ultimately, it’s important to remember that these are private companies, and therefore at their core, their business model is designed to make the most profit possible for their shareholders. If it is deemed that their profits are exorbitant, then the relevant governments could increase regulation and taxes to help support those in the world most impacted by food and energy inflation. Issues throughout the world are driving inflation on the supplier side and that companies are unfortunately forced to raise prices in line with that to protect their profits. Economy Finance Monthly. 56
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