Spectre of inflation returns as food prices jump at fastest rate since April
Spectre of inflation returns as food prices jump at fastest rate since April
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Food prices have soared with the sharpest monthly increase since April last year, signalling a trend of what is to come, according to the latest data. Overall food prices went up by 0.5% from December to January, with ambient food experiencing a 1% surge as costs for sugary treats, chocolates, and booze ramped up, the British Retail Consortium (BRC) said. Inflation data reveals that food prices in January were 1.6% higher than the previous year, slightly down from 1.8% in December, as per the BRC-NielsenIQ Shop Price Index.
Fresh food inflation decelerated to 0.9%, a drop from December's 1.2%, while ambient food inflation decreased to 2.5% in January from 2.8%. Despite an overall dip in shop prices in January, the deflation rate slowed to 0.7% from 1% in December. B. RC chief executive Helen Dickinson commented: "Extensive January sales was good news for bargain hunters, with non-food products showing significant discounts, particularly for furniture and fashion, but less good news for retailers needing to shift excess stock.
"This month’s figures also showed early signs of what is to come, with month-on-month food prices rising at their fastest pace since April last year. Ambient food saw a 1% jump as prices spiked for sugary products, chocolates and alcohol. "Price cuts and deflation may not last much longer as retailers will soon feel the full impact of £7bn of new costs announced at the last Budget.".
Analysts predict widespread price increases due to higher employer NICs, a rise in the national living wage, and the introduction of a new packaging levy. According to Mike Watkins, head of retailer and business insight at NielsenIQ, "Shoppers continue to be unsure about spending and many are seeing a continued squeeze on their household incomes.
