Consumers hit by further food price hikes

7 August 2008
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%.

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