The cost of feeding a family has continued to soar as basic food items are hit by high rates of inflation. And retailers said the problem would get worse, with food inflation “set to increase further later in the year” unless Chancellor Rachel Reeves acts.
Official data on Wednesday showed that inflation remains stubbornly high at 3.4%, far above the target level of 2%. It is bad news for mortgage-holders, because it means a significant fall in interest rates becomes less likely. But figures showing which goods are most affected reveal the cost of basic food items actually rose by 4.4%.
The cost of jam, chocolate and other sugary products rose by 11% over the course of the year – and 1.4% in just one month.
The price of meat is up 4.8% over 12 months. And the cost of cooking oil also rose significantly.
Kris Hamer, director of insight at the British Retail Consortium, said new costs on businesses that came into effect in April – such as the National Insurance increase imposed by Chancellor Rachel Reeves – was partly to blame.
He said: “Headline inflation held at 3.4% as higher bills and new business costs introduced in April continued to filter through into the economy.
“Worryingly for consumers, the price of the weekly shop rose once again as food inflation continued its upward trajectory, reaching its highest level since February last year.
“However, there were some bright spots. Deflation persisted in the clothing and footwear category and within the food category, breakfast items such as eggs, bread and cereals fell in price on the month, offering some relief.
“Since October, retailers have warned that the costs from the Chancellor’s Budget could not be fully absorbed and would inevitably lead to higher prices for shoppers.
“Food inflation is now above 4% and looks set to increase further later in the year.
“The Government must now take action to relieve cost pressures retailers are facing. Ensuring no shop pays more under business rates reform would be a meaningful step forward, offering much-needed relief to an industry that continues to see prices, job losses and store closures all rising.”
Chancellor Rachel Reeves said there was “more to do” to bring down inflation and help with the cost of living.
She said: “We took the necessary choices to stabilise the public finances and get inflation under control after the double-digit increases we saw under the previous government, but we know there’s more to do.”
Shadow Chancellor Sir Mel Stride said on Wednesday: “This morning’s news that inflation remains well above the 2% target is deeply worrying for families.”
Office for National Statistics acting chief economist Richard Heys said: “A variety of counteracting price movements meant inflation was little changed in May.
“Air fares fell this month, compared with a large rise at the same time last year, as the timing of Easter and school holidays affected pricing. Meanwhile, motor fuel costs also saw a drop.
“These were partially offset by rising food prices, particularly items such as chocolates and meat products. The cost of furniture and household goods, including fridge freezers and vacuum cleaners, also increased.”