GLIMMER OF HOPE AS FOOD INFLATION FALLS AT LAST
FOOD prices have recorded their first meaningful drop for two years – giving hope for millions of struggling households.
Research out today from the British Retail Consortium and number crunchers NielsenIQ found food inflation eased to 15.4 per cent in May – down from 15.7 per cent in April.
It marked the first fall since May 2021, barring a small 0.1 per cent drop in January this year.
The decline was driven by fresh food, where prices still jumped by 17.2 per cent year-on-year, but down from 17.8 per cent in April.
As if to show the ongoing pressure, the price of all other food products – termed ambient – rose by 13.1 per cent, up from 12.9 per cent in the year to April. And shop price inflation across-the-board picked-up from 8.8 per cent to 9 per cent.
Soaring food prices were one reason why the headline rate of inflation published by the Office for National Statistics last week dropped by much less than expected in April.
The fall – from 10.1 per cent to 8.7 per cent – prompted speculation that the Bank of England will be forced to hike interest rates again next month.
Helen Dickinson, chief executive of the British Retail Consortium, said: “While overall shop price inflation rose slightly in May, households will welcome food inflation beginning to fall.”
Peaked
The slowdown was largely driven by lower energy and commodity costs starting to filter through to lower prices of some staples including butter, milk, fruit and fish.
Ms Dickinson added: “Conversely, the price of chocolate and coffee rose off the back of the ongoing high global costs for these commodities. While non-food inflation rose, consumers are benefiting from heavy discounts in footwear as well as books and home entertainment.”
Mike Watkins, of NielsenIQ, said: “To help mitigate the impact of inflation, shoppers are saving money by looking for seasonal promotions on the high street and taking advantage of the price reductions offered by supermarket loyalty schemes.
“Food retailing in particular is competitive, so hopefully the recent price cuts in fresh foods are a sign that inflation has now peaked, albeit ambient inflation may take a little while longer to slow.”