Industry experts are warning that food prices may climb, despite the UK’s current rate of inflation holding steady.
While inflation has not increased in recent months, the Bank of England says global events could soon put pressure on supermarket bills.
Rachel Reeves, Chancellor of the Exchequer, said: “While the war in the Middle East pushes prices up globally, we have got the right economic plan and inflation has held steady.”
However, Karen Betts, chief executive of the Food and Drink Federation (FDF), said the impact of Middle East disruptions on food prices has not yet filtered through.
Ms Betts told The Sun: “It’s good to see an easing of food inflation in May, but consumer prices still don’t reflect the inflation caused by the closure of the Strait of Hormuz.
“It generally takes several months for the increased costs paid by farmers, processors and manufacturers to filter into raised prices at the tills… and we expect food inflation to pick up this year and into next.”
Economists had forecast that inflation would rise to three per cent in May, making the latest figures a relief for many households.
Jim Mellon, chief executive of Agronomics, said: “Global conflicts, along with climate change, are causing food shortages, supply chain issues and price spikes in the UK and beyond.”
George Philips, commercial director at Wains, the UK’s largest World Food distributor and wholesaler, said items at risk of price rises include bottled water, cooking oil, washing up liquid, tea, coffee, rice, sugar, meat, milk, bread, pasta, and cereal.
Retail analysts at Omnisend noted that rising oil and gas prices are making the transport of goods more expensive.
Marty Bauer, a retail analyst, said: “That extra cost rarely disappears, and most of Britain’s biggest retailers will likely do anything to avoid it impacting their margins, so unfortunately, it tends to be passed down the chain, while making sure to avoid deterring consumers entirely.”
The ONS said that food inflation is slow compared to other areas of consumer spending.
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