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UK meals inflation rose for the fourth consecutive month to a one-year excessive in Might, pushed by recent meals costs, in keeping with trade information that implies an ongoing squeeze on family funds.
Meals costs rose at an annual charge of two.8 per cent on this month, up from 2.6 per cent in April and the quickest tempo since Might final yr, the British Retail Consortium mentioned on Tuesday.
Helen Dickinson, chief government of the BRC, mentioned: “Recent meals have been the principle driver, and crimson meat eaters might have observed their steak received slightly costlier as wholesale beef costs elevated.”
Dickinson mentioned retailers have been now absorbing an extra £5bn in prices from will increase to employer nationwide insurance coverage contributions and the minimal wage, which took impact in April.
International food prices have been up by an annual charge of seven.6 per cent in April, in keeping with the UN Meals and Agriculture Group index, with vegetable oil and dairy merchandise rising by greater than 20 per cent yr on yr.
Nonetheless, the BRC mentioned costs of non-food objects remained in deflation at minus 1.5 per cent, conserving total grocery value inflation at minus 0.1 per cent in Might.
The BRC information additionally confirmed a divergence between rising annual inflation for recent meals and an easing pattern for ambient meals, similar to canned items.
The commerce physique’s figures come forward of official inflation information for Might on June 18. BRC and inflation information up to now this yr have proven a pick-up in meals value development in contrast with most of 2024, reflecting greater wholesale meals costs and better prices for companies.
In April, the ONS reported sharp month-on-month value will increase for meat, oil and confectionery as total inflation jumped greater than anticipated to three.5 per cent.
Inflation is anticipated to stay elevated for a lot of the yr, pushed by vitality and meals, although total wage growth continues to outstrip the speed of value will increase.
“We recognise that will probably be extremely painful for individuals, significantly the place that is about vitality, meals,” Clare Lombardelli, Financial institution of England deputy governor, mentioned earlier this month because the central financial institution reduce rates of interest by 1 / 4 level to 4.25 per cent.
Mike Watkins, head of retailer and enterprise perception at NielsenIQ, which compiles the information with BRC, mentioned growing meals costs have been “an additional problem to client spending alongside rising family payments”.
“If client confidence stays weak, as seems to be doubtless, then retailers might should work tougher to encourage customers to spend over the summer time,” he added.
