UK food prices yet to peak as shop price inflation hits record in March

Increase in the cost of sugar and poor harvests in Europe and North Africa contributed to food price rises in March

A London supermarket. Reuters

Shop price inflation reached a new high last month, amid a warning that soaring food prices are yet to peak.

The British Retail Consortium-NielsenIQ index found shop prices are now 8.9 per cent higher than they were a year ago, up from February’s 8.4 per cent increase.

The price of fresh food is now 17 per cent higher than last March — the highest rate on record — with overall food inflation at to 15 per cent, up from 14.5 per cent last month.

The increasing cost of sugar coupled with high manufacturing costs contributed to price rises for chocolate, sweets and fizzy drinks, while fruit and vegetable prices rose as poor harvests in Europe and North Africa limited availability.

Inflation on items other than food also reached a new record of 5.9 per cent, up from 5.3 per cent in February.

“Shop price inflation has yet to peak," BRC chief executive Helen Dickinson said.

“Food price rises will likely ease in the coming months, particularly as we enter the UK growing season, but wider inflation is expected to remain high.”

Cost of living crisis in the UK - in pictures

People demonstrate in central London against the rising cost of living. EPA

Former British prime minister Boris Johnson said workers should accept a pay cut to avoid spiralling inflation. AFP

Inflation in the UK hit an annual rate of 9.1 per cent in May. EPA

The British government told workers they cannot expect pay rises to keep up with the increasing cost of living. EPA

The Bank of England, which says it can do nothing to stop the sharp increase in prices, is raising rates at an unprecedented rate. AFP

The UK was also brought to standstill by the biggest rail strike in 30 years this week, with 40,000 RMT union members walking out in a row over a below-inflation pay offer. PA

The RMT picket line outside Bristol Temple Meads station. PA

The cost of petrol continues to rise. AFP

A protester demonstrates outside Downing Street. EPA

Volunteers in Bradford, northern England, prepare food parcels at the Bradford Central Foodbank. More and more people are visiting the centre. AFP

Mike Watkins, head of retailer and business insight at NielsenIQ, said: “Inflation continues to have an impact on the spending power of shoppers and increased energy bills from April will add more pressure.

“Since food prices have risen retailers have seen more visits but less basket spend, as shoppers manage their weekly food bills by shopping little and more often and seeking out the lowest prices.

“And as Easter approaches some high street retailers will also be offering discounts and promotions to encourage customers to spend.”

Last week the Office for National Statistics reported that UK inflation shot up unexpectedly from 10.1 per cent in January to 10.4 per cent in February, as the vegetable shortages pushed food prices to their highest rate in more than 45 years.