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UK food inflation hit a new record in November as the cost of meat, eggs and milk soared according to new sector data suggesting a “bleak” winter for millions of households.
Annual growth of UK food prices rose strongly to 12.4 per cent in November, up from 11.6 per cent in October, the British Retail Consortium said on Wednesday.
That is the biggest inflation rate in the food category since records began in 2005, and higher than overall shop price annual inflation, which was a record 7.4 per cent in November, up from 6.6 per cent in October.
Responding to the figures, BRC chief executive Helen Dickinson said: “Winter looks increasingly bleak as pressures on prices continue unabated.”
She added that price of foodstuffs, especially for meat, eggs and dairy, had soared because of the spiralling costs of energy, animal feed and transport.
Coffee prices also accelerated in November as high input costs filtered through to price tags, according to the BRC. Fresh food inflation was particularly fast at 14.3 per cent, up 1 percentage point month on month.
The figures suggest that the 45-year high in food price inflation reported by the Office for National Statistics for October will accelerate when the body publishes data for November on December 14. This will amount to a further squeeze for households, particularly poorer ones because they spend on average a larger proportion of their finances on food and energy.
In the first half of November, more than two in five people had to cut back on food shopping and essentials because of the surge in living costs, according to separate data published last week by the Office for National Statistics.
Mike Watkins, head of retailer at NielsenIQ, said: “With prices still rising, the cost of Christmas will be higher this year and shoppers will be managing their budgets more closely than at any time since the start of cost of living crisis.”
Huw Pill, Bank of England chief economist, on Wednesday said he expected inflation to start falling next year, reflecting a stabilisation in the price of gas, which soared after Russia invaded Ukraine.
“We are expecting to see headline inflation tail off in the second half of next year, in fact quite rapidly, on account of those base effects,” Pill told the UK regions economic summit of the Institute of Chartered Accountants in England and Wales.
Pill’s remarks are in line with the Office for Budget Responsibility, the independent fiscal watchdog, which this month forecast UK inflation easing from next quarter, but food price pressures lingering for longer.
Dickinson said that while there were signs that cost pressures might start to ease in 2023, “Christmas cheer will be dampened this year”.
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Image and article originally from www.ft.com. Read the original article here.