Warning food inflation not yet peaked as shop prices reach record high
Prices in British shops have been driven to record highs as inflation accelerated this month, according to a new index.
This rise was particularly driven by food inflation, which experts fear is yet to hit its peak.
There is “simply no way” for those on the breadline to keep up with rocketing costs, campaigners told The Independent – and criticised the government’s “unsustainable” reliance on overburdened food banks “to fill the gap left by a broken safety net and inadequate wages”
Having already soared to a record high of 13.3 per cent last month, food inflation rose even further in January to hit 13.8 per cent, according to the British Retail Consortium (BRC).
More broadly, shop prices are now 8 per cent higher than they were last January, up from 7.3 per cent in December and above the three-month average of 7.5 per cent, according to the latest BRC-NielsenIQ Shop Price Index.
Rising food production costs and elevated fruit and vegetable prices saw the cost of fresh food soar by 0.7 points in a month to 15.7 per cent, while the cost of ambient foods – those stored at room temperature – also hit new highs of 11.3 per cent.
The price of sugar, alcohol and margarine has risen by more than other products this month, the BRC told The Independent, due respectively to: supply restrictions in India; rising wholesale costs and fewer discounts; and rising vegetable oil prices as a result of the Ukraine war.
The rise in shop prices came despite inflation of both clothing and footwear costs easing in January.
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“Retail prices rose in January as discounting slowed and retailers continued to face high input costs,” said BRC chief executive Helen Dickinson.
“With global food costs coming down from their 2022 high and the cost of oil falling, we expect to see some inflationary pressures easing. However, as retailers still face ongoing headwinds from rising energy bills and labour shortages, prices are yet to peak and will likely remain high in the near term as a result.”
The figures come days after the International Monetary Fund downgraded its UK growth forecast once again, predicting that Britain’s economy will have the worst GDP performance of all G7 economies – even sinking below Russia – with a contraction of 0.6 per cent.
“Consumer demand is likely to be weak in the first quarter due to the impact of energy price increases and, for many, Christmas spending bills starting to arrive,” said Mike Watkins, of NielsenIQ.
Rising food inflation will further squeeze household budgets, he said, warning that the rising cost of essential groceries would mean shoppers had little income left to stimulate demand in other retail sectors.
Charities warned that increasing numbers of people were being “pushed further into debt”, and urged the government to step up their support for those in need.
Sabine Goodwin, who coordinates the Independent Food Aid Network, warned that growing numbers of people were resorting to food banks to survive, saying: “Meanwhile, food bank teams are trying their utmost to meet this demand just as their resources are being stretched too far.
“The government’s reliance on overburdened volunteers and charitable food aid staff to fill the gap left by a broken safety net and inadequate wages is unsustainable and indefensible.”
The government “has a moral responsibility to protect people from rocketing costs”, said Peter Kelly, director of the Poverty Alliance, adding that this is “especially true for the poorest households – because inflation is currently hitting them hardest”.
“With inflation continuing to climb there is simply no way for those already struggling to budget their way out of this,” he said. “What people need is additional support now, on top of what’s already been put in place.
“We can get past this crisis for good if we rebuild and renew our social security system, strengthen public services that help everyone, and create suitable work that pays people at least the real Living Wage.”
