Food prices rose 14.6% during September due to rising costs of staples such as meat, bread, milk and eggs
Food prices rose 14.6% during September due to rising costs of staples such as meat, bread, milk and eggs
British food prices rose last month at the fastest pace since 1980, pushing inflation back to a 40-year high and pressuring the government to balance the books without help for the country’s poorest residents.
Food prices rose 14.6% during September due to rising costs of staples such as meat, bread, milk and eggs, the Office for National Statistics said on Wednesday.
This pushed consumer price inflation back to 10.1%, the highest since the beginning of 1982 and the previous level in July.
The data immediately fueled demands that the government do more to help families and retirees as it struggles to regain credibility after an unfortunate package of tax cuts rocked financial markets.
Treasury Chief Jeremy Hunt He dropped the package after taking office last week, but he has warned it will be a tough winter and will also require spending cuts.
Schools across the country are finding it difficult to feed children in need, said Glenn Sanderson, head teacher at St Eden’s Catholic Academy in Sunderland, with many spending money to subsidize meal programs from textbooks and classroom teaching. He said the suggestion to cut the government budget in this environment is “horrendous”.
“Parents…are having to make tough decisions – do they pay the bus fare to send their child to education or do they use that money to feed their child,” Mr. Sanderson told the BBC. “In today’s society, I think that’s completely unacceptable.” Hunt told the House of Commons this week that the government “will prioritize helping the most vulnerable while providing broad economic stability.” But he also backtracked from Prime Minister Liz Truss’s previous commitment to raise pensions in line with inflation.
Downing Street spokesman Max Blaine said “no decision has been made” on pension guarantees.
“We are very aware of how vulnerable pensioners are,” he said, but the government “is not making any commitments on any specific policy areas at this point,” he said.
Russia’s invasion of Ukraine The US has pushed up food and energy prices around the world, disrupting shipments of natural gas, grain and cooking oil. Prices rose last year as the global economy began to recover from the COVID-19 pandemic.
While a jump in food costs in Britain last month caused the biggest loss to the household budget, prices are rising across the board. Transportation costs increased by 10.9%, furniture and household goods by 10.8% and clothing by 8.4%. Housing costs rose 9.3%, driven by rising energy costs.
The government has sought to protect consumers from the effects of rising energy prices by limiting the cost of electricity and natural gas. But Hunt has now narrowed the price range to six months instead of the two years originally promised.
That means inflation is likely to last longer than previously forecast, said Jack Leslie, senior economist at the Resolution Foundation, a think tank focused on improving living standards for low- and middle-income people.
“This bleak outlook means that family incomes will continue to decline sharply again next year, particularly as support for energy bills is withdrawn,” Leslie said in a statement. “This is a reference to debate within the government as to whether past commitments to increase benefits or pensions in line with prices should be the next U-turn to be announced.”
Sharp inflation also fuels hopes that the Bank of England will raise interest rates more quickly as it struggles to bring inflation back to its 2% target.
The central bank is trying to slow inflation without putting the UK into recession. British economy shrank by an estimated 0.3% in August After rising just 0.1% in July, according to ONS data.
“Today’s warmer-than-expected inflation reading paves the way for a more aggressive interest rate hike at the next Bank of England meeting in early November,” said Victoria Scholar, head of investment at Interactive Investor. “However, the central bank is in between a rock and a hard place as it looks to contain price pressure without inadvertently adding to bearish risk.”
The same calculation is underway in other countries, but the US Federal Reserve has indicated that it will continue its rapid rate hike to counter inflation, which is a decade high of 8.3%.
The European Central Bank’s meeting next week is expected to make another big increase to beat record inflation in the 19 countries that use the euro currency.
The European Union’s statistics agency, Eurostat, on Wednesday slightly lowered adjusted eurozone inflation for September to 9.9%.