Food price surge fastest since 2008

FOOD prices jumped at the fastest pace since 2008 last month, as economists warned that “ugly” increases were spreading through the economy.

Food and drink prices were 13.1pc higher in August compared with a year ago, the largest jump since August 2008.

The Office for National Statistics (ONS) said some dairy products were 40pc more expensive, while meat prices were up by a fifth.

Prices, as measured by the consumer prices index (CPI), rose 9.9pc across the economy in the year to August. This was down from 10.1pc in July and slightly lower than analysts’ estimates for a double-digit rise.

The headline rate fell for the first time in almost a year thanks to a decline in petrol and diesel costs.

Benjamin Nabarro, an economist at Citi, described the data as “ugly, but expected”.

He said the increase in core inflation suggested further “forceful” action from the Bank of England was necessary to keep a lid on prices.

The figures will fuel further pressure for a steep rate increase when the Bank announces its decision on Sept 22. Markets are betting on a 0.75 percentage point rise, the steepest in 30 years.