UK food prices rise as milk shortage puts strain on family budgets
A global milk shortage and rising cereal prices helped push UK food prices up 2.2 per cent in September, adding to the strain on family budgets.
According to the latest BRC Nielsen shop price index, the September increase compared to a 1.3 per cent rise in August.
It found that fresh food inflation gained a full percentage point in September, rising to 1.8 per cent.
British Retail Consortium (BRC) chief executive Helen Dickinson said: “A number of factors have combined to drive a sharp jump in food price inflation. A global milk shortage has pushed up butter prices, while rising global cereal prices earlier in the year are now feeding onto shop shelves.
“At the same time we are starting to head out of the UK season for some vegetables and, as we flagged last month, that means enhanced exposure of food prices to the Sterling exchange rate.”
The index found that, overall, shop price deflation - both food and non-food - hit a four year low in September. Prices fell just 0.1 per cent compared to the 0.3 per cent year-on-year decline seen in August.
But the BRC warns that prices are now teetering on the brink of inflation as retailers are no longer able to shield shoppers from the impact of higher import prices due to the weaker pound.
Dickenson said: “Stretched family budgets will continue to feel the strain as increases in the price of the weekly shop add to overall rising inflation which continues to outpace wage growth.”
Nielsen’s Mike Watkins sees a silver lining. He said: “The good news is that inflation is expected to peak over the next few months and with consumers still uncertain about when and where to spend, we expect competition for discretionary spend to intensify as we head towards the end of the year with more promotional savings for shoppers across all channels.”
