Food price rises outstrip UK inflation

Telegraph

a day ago

Households are facing more expensive weekly shops after food prices outstripped inflation because of higher costs for British staples such as beef and teabags.
According to the British Retail Consortium (BRC), food price inflation rose to 4pc in July – its highest level since February last year.
The latest figures from the Office for National Statistics (ONS) show the UK's inflation rate rose to 3.6pc in the year to June, up from 3.4pc in May.
The statistics body said that price rises in food and fuel had pushed inflation higher. The UK's inflation rate still stands some way off the Bank of England's 2pc target.
Helen Dickinson, the chief executive of the BRC, said staples such as 'meat and tea' were hit the hardest as wholesale prices suffered from tighter global supplies.
The recent acceleration in food prices also comes as retailers pass on increased labour costs after measures from the Chancellor's October Budget took effect in April.
Retailers had previously warned that increases in employment costs would lead to higher prices on shelves.
Ms Dickson said that the Government should 'think carefully about the next Budget', adding that if the Chancellor introduced tax rises this year, it would lead to additional costs for households.
'Further tax rises will ultimately hurt households, locking in inflation and forcing people to pay higher prices to put food on the table,' she said.
'Shop around'
It marked the sixth consecutive month of rising food inflation. Household expectations of inflation are particularly alert to food prices as the cost of a weekly supermarket shop continues to climb.
Mike Watkins, from data firm NielsenIQ, said: 'Consumers' household budgets are coming under pressure with the food retailers now seeing price increases above the consumer prices index.
'However, price competition helped by promotional activity will still mean that shoppers can save money by shopping around.'
Mr Watkins added that as inflation remains elevated, 'high street retailers will also be concerned about customer retention over the summer holiday season if they are to maintain sales momentum'.
Overall shop price inflation increased to 0.7pc in July, up from 0.4pc in June, according to figures compiled by the BRC and NielsenIQ.
Summer sales for clothing and furniture brought non-food inflation to -1pc in July, against a decline of -1.2pc in June.
Retailers will also face fresh pressure from a packaging tax coming into force later this year.
There are concerns the changes – which will see food and drink companies charged a levy based on how many tonnes of packaging such as glass, aluminium and plastic they use – will lead to higher costs for companies and increased prices for consumers without driving a rise in recycling rates.