According to official figures, food costs are continuing to fuel inflation in the UK as prices for olive oil, sugar, and low-fat milk have surged by more than 40% in the year to January.
Grocery prices are one of the main drivers of overall inflation, alongside energy bills. While overall UK price inflation fell to 10.1% last month from 10.5% in December, the cost of food remains at a 45-year high. Food prices were high at 16.7% in the year to January, a slight dip from 16.8% in December.
Matt Hood, manager director of Co-op Food, warned that grocery prices would remain high this year. He said that prices continued to rise in January, and it is “incredibly tough” as costs for grocers did.
However, they are trying their hardest not to flow it all through to their customers, and they are trying to offset as much as possible before it has to flow through to retail prices.
UK inflation eases slightly in January
The UK’s inflation rate fell from 10.5% to 10.1% due to slower fuel price increases, leading to lower transport costs.
There was also a decrease in prices of cafes and restaurants after the Christmas period. Despite this, the inflation rate is still high, which is attributed to food prices, which remained at 16.7% in January, a small drop from December’s 16.8%.
The Bank of England’s monetary policy committee had earlier predicted this rate.
The supply chain problems linked to the pandemic and the invasion of Ukraine by Russia have caused inflation to rise. Chancellor Jeremy Hunt welcomed the decline in inflation but acknowledges that the fight is far from over. Labour’s shadow chancellor, Rachel Reeves, called for a windfall tax on oil and gas giants and a long-term plan to move towards clean energy to help bring down prices.
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