Food prices rise at fastest rate in 45 YEARS
Food prices rising fastest in 45 YEARS
- The most recent inflation figures show a small overall decline, but a huge increase in food costs
- Consumers are being hammered at the box office with increases of nearly 20%
- Olive oil, milk and ready meals are among the items that have been rising in price recently
Food costs are rising at the fastest rate in 45 years, with the latest inflation figures showing that supermarket shoppers experienced 19.1 percent price increases in the year to March.
The most recent inflation figures from the Office for National Statistics show a 10.1 percent increase in overall consumer price index inflation in March, down slightly from February’s 10.4 percent.
But the increase is still higher than expected, with economists settling for a 9.8 percent increase for March.
Either way, the 10.1 percent headline inflation rate obscures the fact that the cost of food is rising much faster than anything else, currently at 19.1 percent — up from 18.2 percent in the year to February.
The strongest increases in food prices were for olive oil (+49%), milk (+38%) and ready meals (+21%).
More than you can chew: Consumers are facing sharp increases in food prices
ONS chief economist Grant Fitzner said: “The main drivers of the [overall] down were motor fuel prices and heating oil costs, both of which fell after strong increases at the same time last year.
‘The prices of clothing, furniture and household goods rose, but at a slower pace than a year ago.
“However, these were partially offset by the cost of food, which is still rising sharply, with bread and grain price inflation at record highs.”
Rob Morgan, principal investment analyst at Charles Stanley, said: “Worryingly, food inflation appears to be the most persistent of its components, rising 1.1 percent in one month.
“Food prices are alarmingly 19 percent higher than a year ago, a dire situation for many households struggling to buy basic necessities and make ends meet.”
However, as far as milk prices are concerned, experts say there may be “light at the end of the tunnel” as four supermarkets all bucked the trend last week by cutting prices.
Tesco led the charge, cutting the price of a 4 pint carton of milk from £1.65 to £1.55, two pints from £1.30 to £1.25 and one pint from 95p to 90p.
Sainsbury’s then followed suit and reduced milk prices to £1.25 for two pints and 90p for one pint, as did Aldi and Lidl.
Both Lidl and Aldi have matched Sainsbury’s and Tesco’s move by reducing two pints to £1.25 and a single pint to 90p.
The Bank of England has an inflation target of 2 percent per annum.
What is Inflation?
Inflation is a way of measuring the rate at which prices rise, fall, or stay the same.
The Office for National Statistics calculates inflation by tracking the prices for a basket of goods and services over time.
If something costs £1, and it costs £1.10 a year later, the inflation rate at that time was 10 percent.
Inflation is just an average, and how much prices rise for you depends on what you spend your money on.
Why are food prices so high?
Global food prices started to rise after the pandemic as economies started to recover, and the impact, coupled with the invasion of Ukraine, has been severe.
Higher energy bills have also forced producers to raise prices, which spilled over into everyday products such as milk, eggs and bread.
But there are also long-term structural problems. The impact of higher labor costs dates back long before the invasion and pandemic in Ukraine.
Brexit has been an aggravating factor as recruitment has declined in the more labour-intensive parts of food production, which often relied on workers from Eastern Europe.