Food price inflation hits record high in UK

UK food prices hit their highest since 1980 after inflation rose by double digits last month.

Last month’s inflation rate has squeezed the living standards of millions of UK households, especially those on lower incomes struggling with high costs.

The UK economy has been hit hard by soaring natural gas prices due to the war between Russia and Ukraine, supply chain crises caused by the pandemic, a tight labor market and a failed attempt by former Prime Minister Liz Truss to reform the economy.

Overall store prices were up 6.6% year-on-year, according to a November 1 British Retail Consortium (BRC) and Nielsen Shop Price Index survey.

However, food price inflation rose to a record annual rate of 11.6% in October, the highest since July.

The total cost of fresh food and UK staples such as tea, milk and sugar are all on the rise. Fresh food prices rose 13.3% year-on-year from 12.1% last month.

Non-food inflation jumped to 4.1% from 3.3% in September.

“This has been a difficult month for consumers, faced not only with higher energy prices, but with a more expensive shopping basket,” BRC Chief Executive Helen Dickinson said. to the Independent.

“Rising commodity and energy prices and a tight labor market have pushed prices higher due to significant input cost pressures facing retailers.”

“Costs in some supply chains are starting to come down, but this is more than offset by the cost of energy, meaning a difficult time for both retailers and households,” she concluded. attached.

Food prices were well above September’s 10.6% inflation rise and well above the three-month average rate of 9.7%.

UK inflation to accelerate in autumn

Another report from the UK’s Consumer Price Index (CPI) recorded an annual increase of 10.1% in September, according to the Office for National Statistics.

Core inflation, which excludes volatile food and energy prices, hit a 30-year high of 6.5%.

Food and non-alcoholic beverage prices were the biggest contributors to UK inflation through September, rising 14.5%, the biggest rise since April 1980, according to the Consumer Price Index.

Mike Watkins, Head of Retail and Business Insights at NielsenIQ, told The Independent:

“With increasing pressure on discretionary spending in both non-food and food retail, delivering superior value is critical in the battle for shopper loyalty over the next eight weeks.”

New UK Cabinet seeks to stabilize UK economy

The September CPI report is also used as a reference point for the ‘triple lock’ index of public pensions, according to Reuters.

Meanwhile, Reuters reported Pensioners have not received a clear answer from Prime Minister Rishisunak’s new cabinet on whether pensions will rise in sync with prices in 2023.

After new Treasury Secretary Jeremy Hunt announced cuts to state subsidies for home and business energy bills, many poor households are unsure of the extent of financial assistance available.

Hunt said the government will reduce the scope of the subsidy program from two years to six months.

He made the announcement to stabilize Britain’s financial markets after they fell due to the former prime minister’s failed economic growth agenda.

The latest data will put pressure on the Bank of England to raise interest rates further next month.

The US counterpart of the Federal Reserve announced on November 2nd that it will raise interest rates by another 75 basis points.