Sharpest increase in food prices on record

FOOD price inflation has accelerated to a record high as retailers warned of worse to come amid an intensifying cost of living crisis.

Retail food costs rose 4.3pc in the year to May, the highest rate since April 2012, according to the British Retail Consortium (BRC).

Mike Watkins from Nielseniq, which gathered the data, said retailers “can no longer absorb the full extent of increased supply chain costs now hitting the industry” and were rapidly passing increased costs on to shoppers.

He warned promotions were dwindling, advising budget-conscious shoppers to go for cut-price deals as multi-buy offers disappear.

Overall shop price inflation reached 2.8pc, the fastest pace since July 2011.

Helen Dickinson, the BRC’S chief executive, said: “Retailers have been working hard to protect their customers from these rising costs, particularly at a time when households are being impacted by a huge rise in household energy bills.”

The increase in prices will “get worse before it gets better”, she added. “With little sign that the cost burden on retailers will ease any time soon, they will be left with little room for manoeuvre, especially those whose supply chains are affected by lockdowns in China and the war in Ukraine.”

The warning came as confidence among business leaders fell to an alltime low in May, according to a survey by the Institute of Directors, with two fifths citing inflation as their top concern. It found energy cost concerns have peaked.

Just 28pc of business leaders said they expected inflation to be near the Bank of England’s 2pc target by the end of 2023, down from a third in April.

IOD chief economist Kitty Ussher said the Government would need to work hard to boost business confidence in the coming months.