Food inflation reached 4.5% in December, with sugar and confectionery prices up 10.2%, behind the surprise rise in UK inflation to 3.4%
Rising food costs helped drive up inflation(Image: Getty Images)
Steep rises in the prices of coffee and sugar are fuelling a surge in food inflation, contributing to an unexpected increase in overall inflation. The cost of food escalated by 4.5% in the year leading up to December, outpacing the total inflation rate of 3.4% by over one percentage point.
Today’s Consumer Price Index (CPI) inflation figures, released by the Office for National Statistics (ONS), took economists by surprise, as they had predicted a rate of 3.3%.
Products often subject to so-called “sin” taxes have seen the steepest price increases. Sugar and confectionery lead the pack in food and drink inflation, with a staggering 10.2% rise over the past year. Coffee, tea and cocoa (9.6%), butter (8.9%) and meat (6.9%) have also seen their costs skyrocket, far exceeding the general rise in food and drink prices.
Tobacco prices have risen by 6.5%, likely due to the hike in duty rates announced in the October Budget, as reported by City AM.
Whilst food and drink prices have climbed 4.5 per cent over the past 12 months, the cumulative inflation on those goods in recent years has been considerably steeper, placing a significant burden on household budgets.
Following a 0.4 per cent drop in 2020, food costs have risen consistently each December since, culminating in an overall price surge exceeding 25 per cent.
Harvir Dhillon, economist at the British Retail Consortium, acknowledged that these food inflation figures demonstrate the financial pressure facing British consumers, though noted some relief in the declining prices of jam and honey.
Dhillon said: “[The] Government must not be complacent about inflation; if incoming regulations, such as the Employment Rights Act, increase costs further, this will be felt by consumers – not only in higher prices, but from the knock-on impact to jobs, which have already fallen significantly over the past year.”
ONS chief economist Grant Fitzner said: “Inflation ticked up a little in December, driven partly by higher tobacco prices, following recently-introduced excise duty increases.
“Rising food costs, particularly for bread and cereals, were also an upward driver.”
Shadow Chancellor Mel Stride cautioned that the government must rein in soaring prices, stating: “Inflation is rising because of Labour’s economic mismanagement – pushing up the cost of living and punishing the most vulnerable.”
