UK food inflation continued to rise in December, according to new sector data that showed “another tough year for consumers and businesses”.
The annual growth of British food prices reached 13.3 percent in December, the British Retail Consortium said on Wednesday. That’s up from 12.4 percent in November, and the highest reading since trade body records began in 2005.
Overall retail price inflation fell to 7.3 percent in December from a record 7.4 percent in the previous month.
The figures suggest that households will continue to come under sharp pressure even though overall inflation is expected to ease this year from a multi-decade high in 2022.
He also suggested that the 16.6 percent food inflation rate – a 45-year high – reported by the Office for National Statistics for November could accelerate when the body publishes December figures this month.
In response to Wednesday’s data, BRC chief executive Helen Dickinson said: “2023 will be another tough year for consumers and businesses as inflation shows no immediate signs of abating.”
He added that prices of many essential foods are rising as Russia’s war in Ukraine continues to increase the cost of feed, fertilizer and energy.
This is despite some economists stating that the increase in the overall annual price level has passed its peak. The ONS last month found UK inflation had fallen from a 41-year high of 11.1 per cent in October to 10.7 per cent in November.
In the Financial Times’ annual survey of leading British economists, DeAnne Julius, a distinguished fellow at the Chatham House think-tank, said that “if energy prices do not rise higher because of Russia’s actions, then inflation will continue to fall” this. year.
The BRC data is in line with forecasts by the Office for Budget Responsibility, the fiscal watchdog, which said in November that food price pressures could persist in 2023 even as overall inflation rates began to moderate from the first quarter.
Mike Watkins, head of retail and business insights at consultancy NielsenIQ, said rising food inflation would “put more pressure on household budgets”, making it “unlikely to see an improvement in consumer mindsets” in the near term.
A separate ONS survey published last month found that, in the first half of December, 45 per cent of Britons had to cut back on food and essentials shopping due to rising living costs. Rising prices of essential goods have the greatest impact on the poorest households, as on average a greater proportion of their finances are spent on food.
Meanwhile, a report published on Wednesday by the Resolution Foundation highlighted that disabled people, who account for one-third of the poorest households in England, are “highly exposed” to the cost of living crisis.
The think tank found that disabled people are almost three times more likely to live in material deprivation than the rest of the population. It added that 31 percent of people with disabilities will have to cut back on food spending this winter, compared to 18 percent of people without disabilities.
Charlie McCurdy, co-author of the report, said that “while the rapid rise in prices for essentials has an impact on people across the UK, people with disabilities are more exposed to the most severe effects”.