Britons are paying more for their everyday products like milk and baby food than other Europeans, as inflation chips away at household budgets, states a recent report.
An analysis of supermarket sales transactions shows the UK experienced the steepest increases across most of ten major product groups compared with an average of prices in Germany, France, Italy, Spain and the Netherlands, Financial Post stated on Saturday (20).
The report cited data by Circana to state that milk and cheese prices jumped the most in the year to March, but pet food, laundry detergent, infant formula and diapers also recorded more marked increases than in Europe.
Rising food prices have now replaced energy costs as the biggest cause of inflationary concern for the Bank of England. According to a research by the Center for Economic Performance at the London School of Economics, Brexit added an extra £5.8 billion to UK consumers’ food bills in the two years to the end of 2021.
“There needs to be a laser focus on immediate issues and the drivers of inflation,” says Karen Betts, chief executive officer of the Food and Drink Federation. “Action to fill labor and skills shortages and to simplify current and upcoming regulation, as well as simplifying post-Brexit labeling changes, would help to drive down prices.”
Meanwhile, the rising cost of food will overtake the price of energy as the driving force behind inflation over the summer, hitting poorer households the hardest, Resolution Foundation has said.
Grocery bills that had rocketed by almost 20 per cent during the past year would continue to increase, replacing energy prices that were expected to begin falling over the next few months. The thinktank said it was not clear that politicians were prepared for another year of food price rises or that “policy debates have caught up with the scale of what is going on”.
The Resolution Foundation’s report, Food for Thought, says food prices are expected to contribute “more to overall inflation than energy” in the months ahead.
“Between March and September 2023, food prices are expected to contribute around 2 percentage points to inflation each month, while the contribution of energy prices is set to fall from 3 percentage points to less than 1,” the report estimates.