UK food price inflation at 15-month high
07 Oct 2010
Hard-pressed UK shoppers have been hit by a double whammy as food price inflation hit a 15-month high with the cost of clothing also rising.
Overall shop price inflation was at a five-month high in September, with the annual rate of food price increases rising to 4 per cent from 3.8 per cent in August.
The cost of food climbed higher as the rising prices of wheat and oil feed sent bread and meat supplies prices rising, as revealed in a monthly survey by the British Retail Consortium (BRC) and Nielsen. This was the key factor behind the overall shop price inflation rising to 1.9 per cent last month – a rise of 0.2 per cent since August. Non-food inflation was also up by 0.7 per cent.
However, according to BRC director-general, Stephen Robertson, although earlier increases in commodity costs had had an effect on overall prices, the worst may be behind.
He said that food inflation was at a 15-month high as the effect of earlier rises in wheat and oil prices work through to things like bread and meat, but these production costs appear to be stabilising now.
Sir Terry Leahy, the chief executive of Tesco, also tried to counter recent speculation that food inflation would continue rising. He said there was a bit of food price inflation but it was not quite as high as sometimes reported - between 2 per cent to 3 per cent. He added it might increase a bit but it would not reach the heights of 2007 when it ranged between 8 to 10 per cent.
