Article

What is inflation doing to your Christmas dinner?

19 December 2021
Katie Williams
Katie Williams
Editorial & Investment Content
What is inflation doing to your Christmas dinner?
Dublin, Ireland

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.

Figure 1. The average price of a Christmas dinner for four is up 3.4% year-on-year
Figure 1. The average price of a Christmas dinner for four is up 3.4% year-on-year

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.

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