Times of change that keeps an odd bunch in the pink

Focus: Every now and then, when watching the markets, you can have the wool pulled over your eyes, notes Rupert Wright.

Sheep shearing in Parkes, Australia. Ian Waldie

Very few things surprise me in the Financial Times these days.

Markets go up and they go down, although people seem to bleat more when they go down, even if recently they have seldom dropped to the level of even a year ago.

However, it was rather curious to see the British actor and writer Stephen Fry interviewing Lady Gaga, the US pop star, in its pages the other day, an event so auspicious it warranted a photo of the pair of them on the front page.

But it was a Saturday and perhaps the editor had gone shooting. I thought it was a one-off.

However, ensconced in an Oslo restaurant the other day (actually I was outside, sitting on a sheepskin although it's nearly midsummer) my eyes were drawn to a letter on the editorial pages. It was the big letter, in pole position, so I assumed that a captain of industry or a financial big cheese, somebody like Alan Greenspan, Jean-Claude Trichet or even Sir Bob Geldof, had written it. The language was certainly grandiose enough. Under a headline reading "Central bankers should counter inflation myopia", whatever that is, one sentence read:

"The purpose of inflation targeting is not to target a constant cost of living - no institution can control this - but to improve economic efficiency by allowing relative price signals to work."

I read this a number of times, and even reading it over again now, I have no idea what the person is talking about. Something about targeting and relatively is about as close as I can fathom, but what are "relative price signals"? Then I saw the name of the author: Eric Lonergan.

He may not be a household name to many of you, but almost 20 years ago he came to work with me at Euromoney, a financial publishing firm in the City of London. He was smart enough then to quickly realise there was more money in finance than in writing about it, and disappeared to a career in banking. He is now at M&G Investments. My spies tell me he is rather stouter than he once was, but still the same charming individual. I can't say his writing style has improved, although doubtless such obtuseness passes muster in Bishopsgate.

The other development that startled me, and perhaps it was because I was sitting on a sheepskin that it suddenly seemed relevant, was that the price of wool had doubled in the past year. The writer of the piece blamed those traditional bogeymen "Chinese demand, and flooding and droughts in Australia" as if it weren't enough sheep were dropping dead with nothing to drink, but those that survived were drowning only days afterwards.

Rather like a cup of coffee in a restaurant, the price of the coffee beans is pretty marginal. According to my pal Hughie Holland, who has just sold Kilgour, one of Savile Row's finest tailors, the wool accounts for "10 per cent of the price in Savile Row, but 50 per cent of the cost in the Far East". You need about a kilo of wool to make a suit. Even at today's heady prices that's only about US$15. But I have often been struck by those Loro Piana advertisements showing the company has paid a record price for a bale of merino wool, the contents of which will be made into suits costing anything up to $20,000 (Dh73,460). I had been thinking about putting in my regular order - there's a nice shop on Via Borgognona in Rome - but maybe I should wait until the weather sorts itself out in Australia.

Not only may I have to pay more for my next whistle and flute, but Scots will have to fork out a bit extra for their kilts. Under the heart-stopping headline "Rise of 30% since start of year puts wind up kiltmakers" a recent report warned the days of cut-price kilts are over.

One hopes the canny Scots don't try to save themselves a few bob by making the kilts shorter. It is widely rumoured a true Scot wears nothing under his kilt, the strange skirt-type clothing favoured by our friends from the Highlands. It was to stop them parading about on windy days that the wise Roman Emperor Hadrian ordered the construction of a wall to keep them out of England.

It is said the flapping of a butterfly's wings in the Amazon can cause a hurricane in the Caribbean. That may be nothing compared to what the rise in the cost of wool can do the wearers of kilts everywhere - or indeed the poor people who have to observe them resplendent in such. Thank goodness we have been warned by the pink newspaper.