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Speaker 1: Food prices update for you this morning. New Informtric's numbers

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Speaker 1: show supply costs to supermarkets two point three percent higher

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Speaker 1: in February this year than the same time last year,

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Speaker 1: steady on January. Of course, this was all before the

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Speaker 1: all before the war. Brad Olsen, Informetric's principal economists with

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Speaker 1: us this morning. Morning.

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Speaker 2: Brad, Good morning.

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Speaker 1: And that's the thing, isn't it's all backwards looking now

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Speaker 1: that the data that we're getting, any supermarket's going to

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Speaker 1: put up prices soon or are they now? Do we know?

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Speaker 2: Well? I think that one of the challenging questions at

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Speaker 2: the moment is that exact point we know there's further

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Speaker 2: pressure coming through the supply chain. The question is how

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Speaker 2: quickly all of this will emerge through because for a

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Speaker 2: lot of producers, you know, they've probably locked into two contracts,

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Speaker 2: you know, maybe with their transport agency or whatever else

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Speaker 2: for the next sort of months or so, so we

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Speaker 2: might not see the figures show up as immediately in March.

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Speaker 2: It's probably the one area we are a bit more

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Speaker 2: focused on is probably the likes of produce because the

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Speaker 2: cost there do change around a lot, and again, transport

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Speaker 2: costs are fairly important there, not only for moving produce

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Speaker 2: to store, but because all of the harvesting and everything

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Speaker 2: else has to go through with using diesel. What we

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Speaker 2: have seen as well is that margins are in the

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Speaker 2: transport sector have been squeezed a lot the last couple

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Speaker 2: of years, and so we wouldn't be surprised to see

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Speaker 2: that sort of pass through emerging. And given you know

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Speaker 2: just how much these fuel prices have increased, it would

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Speaker 2: seem sensible that, yes, you'll see some pass through. The

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Speaker 2: question is sort of how quickly. I expect you will

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Speaker 2: see it. Definitely within the next three months as all

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Speaker 2: those various contracts roll over, but I'm not so sure

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Speaker 2: you'll see it as immediately, just given that everyone's got

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Speaker 2: things locked up for now.

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Speaker 1: People are talking about this still as a short term spike.

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Speaker 1: You know, will we get a short term spike to inflation,

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Speaker 1: but then we will overcome it? Is that realistic? I mean,

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Speaker 1: we know what happened last time, not long ago, that

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Speaker 1: we had a spike in inflation. I mean, it's so

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Speaker 1: stubborn exactly.

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Speaker 2: And not only so stubborn, but if we were starting

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Speaker 2: from a normal inflation level, if you will sort of

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Speaker 2: around that two percent, then you might get a bit

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Speaker 2: of a feeling that that sort of overall spike might

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Speaker 2: be less intense. People could weather the storm are a

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Speaker 2: little bit more. And we know as well that usually

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Speaker 2: in oil supply shock like this, yes, it hits headline

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Speaker 2: inflation and pushes it up, but it also generally means

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Speaker 2: that households and businesses are spending more on fuel. That's

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Speaker 2: less money in the budget available for other things that

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Speaker 2: will temper demand in other sectors, and so the Rezoo

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Speaker 2: Bank and everyone else can generally look through it. The

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Speaker 2: difference this time, potentially is that we're already seeing inflation

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Speaker 2: out the top of the band, so we've got less

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Speaker 2: room to maneuver. Clearly, businesses are sort of, I guess

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Speaker 2: you could say, more willing and ready to send through

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Speaker 2: price increases, and so you do have to question will

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Speaker 2: businesses overall be going if fuel prices come down and

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Speaker 2: say a month or two's time, will they actually ease

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Speaker 2: their prices or is this going to be part of

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Speaker 2: effectively rebuilding the margin, the buffer the ballot sheet of

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Speaker 2: the last couple of years. And although we often talk

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Speaker 2: about these sort of pressures being short term, short term

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Speaker 2: can still be months and for households out there, you know,

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Speaker 2: for businesses who pay a lot for fuel, months of

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Speaker 2: high costs are still deeply.

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Speaker 1: Uncomfortable on Brad appreciate that. Brad Lsen Info Metrics.

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Speaker 2: For more from Early Edition with Ryan Bridge.

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