Dairy prices soar but fruit cheaper as food inflation hits record high

Prices have been increasing and have been driven by the war in Ukraine.

Dairy prices soar but fruit cheaper as food inflation hits record high according to British Retail Consortium iStock

Food inflation has risen at its fastest rate on record this month with shoppers now paying 10.6% more than they were a year ago, new figures show.

Food price inflation soared past last month’s 9.3% to 10.6%, according to the British Retail Consortium (BRC)-Nielsen IQ index.

Prices have been increasing, driven by the war in Ukraine which has particularly affected the cost of animal feed, vegetable oil and fertiliser, affecting products such as margarine.

However, while the summer drought diminished some harvests, other produce benefited from the prolonged sunshine, helping to bring down prices for fruit such as strawberries, blueberries and tomatoes.

The inflation price for fresh food products are now at a record high, at 12.1% in September up from 10.5% in August – the highest inflation rate for the category on record.

Non-food inflation rose from 2.9% in August to 3.3%, largely driven by heavier hardware, DIY and gardening products hit hard by rising transport costs.

Overall shop price inflation accelerated to 5.7% in September, up from 5.1% in August to mark another record since the index began in 2005.

BRC chief executive Helen Dickinson said: “Retailers are battling huge cost pressures from the weak pound, rising energy bills and global commodity prices, high transport costs, a tight labour market and the cumulative burden of government-imposed costs.

“And, with business rates set to jump by 10% next April, squeezed retailers face an additional £800m in unaffordable tax rises.

“Government must urgently freeze the business rates multiplier to give retailers more scope to do more to help households.”

Mike Watkins, head of retailer and business insight at NielsenIQ, said: “With food and household energy prices continuing to rise, it’s no surprise that NielsenIQ data shows that 76% of consumers are saying they expect to be moderately or severely affected by the cost-of-living crisis over the next three months, up from 57% in the summer.

“So households will be looking for savings to help manage their personal finances this autumn and we expect shoppers to become more cautious about discretionary spend, adding to pressure in the retail sector.”

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