‘End plans that would make meal deals costly’
PLAID Cymru should stop “propping up” Wales’ Labour Government proposals which could see food price promotions scrapped, the UK Government’s Welsh Secretary has claimed.
David Davies suggested the plans could see meal deals scrapped, and would “make meals even more expensive for people in Wales”, as the latest inflation figures have shown that food prices continue to soar.
During Wales Questions in the Commons, Plaid Cymru Westminster leader Liz Saville Roberts suggested that ministers should implement a cap on food prices, similar to the approach of other European countries.
She told MPs: “Food inflation remains above 19% – and it hits the poorest hardest, with Trussell Trust warning that the past year saw a record 185,000 food parcels provided in Wales.
“Meanwhile, supermarkets continue to make record-breaking profits. Many speak of a ‘greedflation’ crisis.”
She asked: “European governments have negotiated with supermarkets to cap food prices. Why won’t his government do this too?”
Welsh Secretary Mr Davies replied: “I want to just remind her that in addition to the pensions and benefits rising with inflation, there are payments of £900 to those on benefits, £300 to pensions, £150 to those in households with disabilities.
“Quite frankly, if she is seriously worried about food inflation, she should be talking to her colleagues who are propping up the Welsh Labour Government about their ridiculous proposals to ban meal deals, which will make meals even more expensive for people in Wales.”
The Welsh Government has previously said it is not considering a ban on meal deals as part of the plans, but could restrict high-fat or high-salt items from being included in meal-deal offers.
The devolved government in Cardiff has also considered banning buy-one-get-one-free promotions for unhealthy food during a consultation on the plans.
Mr Davies had earlier defended the UK Government’s economic policies, which he claimed “are bringing inflation down as the news today demonstrates”.
SOARING food prices have seen UK inflation ease back far less than expected in April, keeping up the pressure on households and raising the spectre of yet more interest rate rises.
The Office for National Statistics said Consumer Prices Index (CPI) inflation fell to its lowest level for more than a year last month, at 8.7% down from 10.1% in March, as energy prices stabilised after sky-high rises a year ago.
But it was higher than forecast by economists, who had pencilled in a drop to 8.2% in April, and more than the Bank of England had predicted just two weeks ago.
The figures showed food inflation at 19.3%, down only slightly on March’s eye-watering 19.6% and remaining close to the highest rate for more than 45 years.
Chancellor Jeremy Hunt admitted food prices are “still rising too fast”.
He said: “Today’s fall in inflation... shows we’re on the right track but there is no room for complacency.”
“It’s tough right now but things will get better,” he added.
Economists said another rise in interest rates was looking increasing likely after inflation had not fallen as fast as hoped.
London’s FTSE 100 Index slumped by 1.6% in mid-morning trading yesterday as the inflation surprise led to bets of more rate rises, compounding global market fears over a US debt deal.
Rates are at 4.5% because the Bank of England has voted for 12 hikes in a row to try to curb the cost crisis, and financial markets are pricing in rates to hit nearly 5.5%.
Samuel Tombs, at Pantheon Macroeconomics, said April’s inflation decrease was “too small a drop for the Monetary Policy Committee (MPC) to stop hiking in June”.
Martin Beck, chief economic adviser to the EY Item Club, said: “Today’s inflation data raises the chances of a further rate rise at the MPC’s meeting next month.
“However, with the MPC set to see another round of labour market and inflation data released before the June meeting, today’s data doesn’t mean a further rate increase next month is a certainty.”
The steep fall in CPI, to its lowest level since last March, reflects last year’s initial sky-high rises in power bills dropping out of the calculation.
Last April, the energy price cap leapt up by 54% to £1,971 after Russia’s invasion of Ukraine sent wholesale gas and electricity prices rocketing, but this year the Energy Price Guarantee (EPG) has been kept at £2,500 since last October.
Ofgem is set to confirm today that energy prices will fall sharply for households in July.
Consultancy firm Cornwall Insight predicts the price cap will fall by £446 to £2,054 a year, based on falling wholesale energy prices.
But inflation has been stubbornly higher than predicted, raising doubts over the government’s ability to meet its target to halve inflation by the year end. The Bank of England’s top bosses admitted to MPs on Tuesday it made errors in its forecasting, but governor Andrew Bailey insisted inflation has “turned the corner”.