Consumers hit by further food price hikes
The cost of fresh food leapt by around 10% in the year to July, putting further pressure on consumers and adding to the likelihood of a recession.
As producers continue to struggle with rising oil and commodity prices, it is consumers who are bearing the brunt of the fallout. According to figures from the British Retail Consortium (BRC), the cost of fresh produce rose by 2% last month, while overall food prices rose by 7% in June.
The BRC said that food producers were being forced to increase their prices as the cost of pork, cooking oils and fats went up. It also commented that the cost of transport, refrigeration and fertilisers were being directly affected by high oil prices.
Better news may be on the horizon, as the price of oil has fallen recently, but Stephen Robertson, director general of the BRC, warned: "Most retail costs remain sharply up on a year ago and are still rising."
Despite increasing calls for the Bank of England's Monetary Policy Committee (MPC) to cut interest rates in a bid to control inflation and ease pressure on the under-fire population, it again maintained the rate of interest at 5%.
Monetary Policy Committee
A committee designated by the Bank of England to regulate interest rates for the UK. The MPC attempts to keep the economy stable, and maintain the inflation target set by the government and aims to set rates with a view to keeping inflation at a certain level, and avoiding deflation. The MPC meets on the first Thursday of each month and discusses a variety of economics issues and constitutes nine members: the governor, the two deputy governors, the Bank’s chief economist, the executive director for markets and four external members appointed directly by the Chancellor.
An increase in the general level of prices that persists over a period of time. The inflation rate is a measure of the average change over a period, usually 12 months. If inflation is up 4%, this means the price of products and services is 4% higher than a year earlier, requiring we spend and extra 4% to buy the same things we bought 12 months ago and that any savings and investments must generate 4% (after any taxes) to keep pace with inflation. Since 2003, the Bank of England has used the consumer prices index (CPI) as its official measure of inflation (see also retail prices index).