RISE IN FOOD & COMMODITY PRICES There is something about food and commodity inflation that makes macroeconomist very uncomfortable. Here’s my suggestion on the food and commodity inflation. The world is structurally short of food. Modest supply shock cause food prices skyrocket. Most of the people don’t buy food on credit basis. So there is a little monetary policy can do. What kept the inflation down were low manufacturing prices as high investment kept on adding to industrial capacity and technological breakthrough in agriculture. Both are not here just yet. Raising the interest rate definitely hurt the growth of UK economy. I say with confidence that raising the interest rate won’t relieve food inflation. Raising the interest rate may curb demand for other goods that are interest sensitive. In UK where unemployment is still a problem, there is no reason for Bank of England (BoE) to raise interest rates. There are two implications, one for the government and the other for