Another example of BBC treating audiences like they’re school children: PS - Richard Scott grow-up

• Oil prices are rising because of speculation. The current supply, believe it or not (I don’t care), exceeds demand, even taking into account China. The speculation is a result of uncertainty and people moving into commodities (rather than equities).
• The rise in wheat prices are partially the result of increased demand for meat in China. Not a ‘western style diet’. More meat requires more food for livestock. But it’s not the principle factor. Last year there were several droughts. Not least in Australia. Similar things happened to major rice producing countries last year. Blaming China is wrong and misleading.
• There is not a linear relationship between inflation in China and the prices of Chinese exports. That would be overly simplistic in the extreme. China is going to suffer from inflation, but as a side effect of increased prosperity and modernisation. Rather than a simplistic relationship between food and oil prices.
• There is a weak causal relationship between biofuels and the price of food.
• Chinese imports are one of the factors that has helped control inflation in the UK. A minor factor given the percentage of Chinese goods as proportions of inflation indices.
• The Government measures of inflation are reliant on indices. So to say prices “on average have risen 3%” is an unwarranted generalisation based on an index. Real inflation may differ. A better phrase would be that prices tracked by X index have risen. Anything else is lazy.

With that in mind please watch the following:

What keeps inflation rising?

And ask yourself whether it did a good job. I think it is misleading and does a poor job of explaining things. One gets the impression that Richard Scott thinks the increased wheat prices are because of Chinese people eating vast quantities of toast.