UK Food Prices Rising at Fastest Ever
Grocery bills are poised to rise again after figures showed the cost of food was pushing prices up at their fastest pace since records began.
May 13, 2008
By James Kirkup
Bills have jumped by almost £1,000 over the past year and more rises are in the pipeline because the cost of manufactured goods is also climbing faster than ever.
"Factory gate" inflation is likely to be passed on to consumers and may make it harder for the Bank of England to cut interest rates. The figure measures the price manufacturers and producers charge firms that buy their goods for resale.
An independent price check on a typical basket of groceries is now 19.1 per cent higher than it was a year ago, MySupermarket.co.uk, a price comparison service, said. The rises have been driven by increases in staples such as wheat.
Its survey found that a loaf of bread had risen by more than 20 per cent in a year and now typically costs 65p.
The cost of a bag of rice is up more than 60 per cent, from 90p for 1kg to £1.45.
Pasta prices have jumped by 81 per cent in Sainsbury's and Asda. In Tesco, the increase was 113 per cent. Butter is up more than 60 per cent, with 250g typically costing 94p. Meat prices are also up, with supermarkets charging as much as £1.64 for 500g of beef mince, a 17 per cent rise.
Economists say a range of factors is pushing food prices upwards. The rising consumption of meat in economies such as China's has increased demand for the grain used to raise livestock.
Figures from the Office for National Statistics yesterday signalled that the pressure on household finances is likely to intensify. It said prices of petrol products leaving refineries rose by 25.4 per cent on the year, reflecting higher global oil prices and taxes. Food prices were up 9.3 per cent.
Vince Cable, the Liberal Democrat shadow chancellor, said: "The inflationary problem is very serious, and not just a passing phenomenon."