UK food price inflation of 15% is coming

UK food price inflation of 15% is coming

UK food price inflation of 15% is coming
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  • The Institute of Grocery Distribution (IGD) predicts food price inflation to reach 15% this summer.
  • The most vulnerable households will be hit the worst by the increase in costs.
  • Official rate of inflation in the United Kingdom reached a 40-year high of 9% in April.
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Food price inflation in the United Kingdom is expected to reach 15% this summer and remain high until 2023, according to a major grocery industry researcher, throwing another blow to the country’s cash-strapped households.

The Institute of Grocery Distribution (IGD) claimed in a recent analysis that the most vulnerable households in the UK would be hurt the worst by the increase in food and drink prices.

In Britain, where grocery price inflation exceeded 7% in the four weeks to May 15, the highest level in 13 years, soaring costs are already putting a strain on household earnings for the first time since at least the 1950s.

In April, the official rate of inflation in the United Kingdom reached a 40-year high of 9%, and it is expected to surpass 10% in 2022, when regulated energy bills are set to rise by another 40%.

The Bank of England is expected to hike interest rates for the seventh time since December to combat inflation.

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However, many homeowners will face higher mortgage expenses as a result of this.

The IGD anticipated that in January 2023, the average monthly grocery bill for a typical household of four will be 439 pounds ($529), up from 396 pounds in January 2022.

It predicts meat, cereal products, dairy, fruit, and vegetable prices to rise the greatest, with products that rely on wheat for feed, such as white meats, likely to suffer price increases in the immediate term.

INFLATION THAT DOESN’T GO AWAY

High levels of food inflation, according to the researcher, will likely last until mid-2023, owing to a number of factors, including the impact of the Ukraine conflict, pre-existing supply chain challenges, the limited effectiveness of monetary and fiscal policy, and the effects of Brexit still being felt.

“Based on our analysis, we don’t expect cost-of-living pressures to ease anytime soon,” IGD chief economist James Walton said. “We’re already seeing families skip meals, which is an obvious sign of food stress.”

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Tesco, the market leader, Sainsbury’s, and Morrisons are the four largest grocers in the United Kingdom.

As a result of the crisis, Britons are downsizing their shopping habits, migrating from mainstream supermarkets to discounters and from branded to lower-cost private label products.

They’re also cutting back on fuel costs as they minimise the number of car trips they take, as well as cancelling streaming services and household appliance maintenance warranties.

 

Last Monday, Pepco, the owner of Poundland, stated that Britons were even cutting back on basic purchases.

 

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Tesco will provide a trading update for the first quarter on Friday.

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