UK Inflation: Food prices ‘worryingly high’ as ​​sugar and milk soar

  • by Daniel Thomas
  • Business reporter for BBC News

image source, Getty Images

Food prices in the UK continued to rise at their fastest pace in nearly 45 years in April, with staples such as sugar, milk and pasta rising sharply.

Food price inflation slowed slightly in the year to April, but was close to a record high of 19.1%.

That comes as inflation across the UK fell sharply, reaching single digits for the first time since August last year.

But it did not fall as much as expected and the prime minister said food prices remained at “an alarmingly high level”.

Inflation is a measure of the cost of living, and to calculate it, the Office of National Statistics (ONS) tracks the prices of hundreds of commodities known as “goods baskets.”

The rate has surged over the past 18 months amid soaring food and energy prices, putting many households under pressure.

Inflation for the year to April was 8.7%, down from 10.1% in March but higher than the forecast of 8.2%.

However, that doesn’t mean prices are going down, it’s just that prices are rising at a slower rate.

Prime Minister Jeremy Hunt told the BBC that while he called the plunge “welcome”, he admitted that “there are things under the numbers that show this battle is far from over”.

“We still have a long way to go.”

Inflation has eased as energy price gains have slowed following the extreme surge a year ago immediately after Russian oil and gas giant Russia invaded Ukraine and was hit with sanctions.

Ukraine is also a producer of cereals and sunflowers, which are used in everything from bread to oil to fodder. Wholesale food prices rose as Ukrainian shipments were disrupted by the war.

Extreme weather has also hit crops such as beets and some vegetables used to make sugar.

But while food prices continue to rise at record rates, the pace of increase in staple foods such as bread, cereals, fish, milk and eggs has slowed slightly.

“If you look at the prices companies are facing and what they’re paying for domestic food, they’ve gone from over 15% annualized last month to less than 10% this month,” said ONS chief economist Grant Fitzner. ‘ said.

The price companies are paying for imported food has also fallen “significantly”.

However, “Of course they’re not reflected on supermarket shelves yet,” he said.

Retailers argue that lower wholesale prices take longer to hit supermarket shelves because they typically sign long-term contracts with food producers.

On Wednesday, M&S chief Stuart Machin said the company has invested in protecting its customers from the full impact of inflation that has hit its profit margins, and it has done the right thing.

How are high food prices affecting you? Get in touch.

Despite declining inflation, so-called core inflation, which excludes food and energy prices, continues to rise, raising concerns that prices will continue to rise.

On Wednesday, the amount traders made in government bonds (essentially IOUs that can be traded in financial markets) is heading towards levels last seen in the turmoil after last year’s mini-budget of former Prime Minister Liz Truss. Rose.

Analysts said this reflected an increased likelihood of a rate hike.

Inflation in the UK is higher than in other developed countries such as 7.6% in Germany, 6.9% in France and 4.9% in the US.

Labor Shadow Prime Minister Rachel Reeves said families would worry that prices for food and other essentials remained too high.

“They will ask why the Conservative government is still not addressing this cost of living crisis adequately and why it is not introducing a suitable windfall tax on the huge profits of the oil and gas giants.”

Inflation is still four times the Bank of England’s target of 2%.

To combat this, the Fed has hiked rates 12 times since December 2021.

In theory, higher borrowing costs mean that people buy less, especially if they have to pay more for things like mortgages, which can lead to price spikes. It should help prevent a rise.

It also makes it difficult for companies to borrow funds to expand their businesses.

The Bank of England has slowed its pace of rate hikes since March, but Wednesday’s inflation data had investors expecting rates to rise further to 5.5% by the end of the year.

Market expectations on Tuesday were for a peak of 5.1%.

Households aren’t the only ones affected by sharp price increases. Welsh farmer Lil Jones said the past 12 months had been “challenging” with rising prices for feed, fertilizer, diesel and electricity.

image caption,

Farmer Lil Jones said there was a glimmer of hope as fuel prices began to fall.

Jones, 44, runs Darwid Farms in Cowen, where he raises 32,000 chickens and raises cows.

He told the BBC that the war between Russia and Ukraine is adding to the pressure as Russia buys fodder from the global market.

But Mr Jones said there is “a glimmer of hope in the coming months” as fuel and diesel prices have started to fall.

How can I save money at the grocery store?

  • Look in your cupboard and figure out what’s already there
  • Visit the minified section first to see if it has what you need
  • Buy things that are close to the sell-by date that will be cheaper and use the freezer

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