Cost of living: Milk and cake prices rise, but fruit gets cheaper

  • By Noor Nanji
  • Business reporter, BBC News

Image source, Getty Images

Food prices rose at their fastest rate on record in September, with products such as milk and cakes getting more expensive, the British Retail Consortium says.

Food price inflation jumped from 9.3% last month to 10.6%, according to the BRC-NielsenIQ price index.

The war in Ukraine has pushed up food prices around the world.

However, long spells of sunshine helped bring down the price of fruit such as strawberries and blueberries.

The cost of living is increasing at its fastest rate in nearly 40 years, driven largely by the rising cost of food and energy.

Overall UK inflation, which measures the rate at which prices rise, was 9.9% in August, according to the Office for National Statistics.

Russia's invasion of Ukraine has been one of the factors pushing up prices at supermarket tills.

The war has disrupted supplies from the two countries, which are major exporters of goods such as sunflower oil, wheat, and fertiliser.

Globally, food price rises have eased in recent months, according to the United Nations Food Prices Index. But any benefits are unlikely to feed through to supermarket bills for several months.

According to the BRC-NielsenIQ price index, UK food inflation accelerated strongly to 10.6% in September. This marks the highest rate of food inflation on record.

The inflation rate for fresh food also hit a record high, at 12.1% in September, up from 10.5% in August, according to the industry group.

However, while products such as milk, cakes, biscuits and margarine have been rising sharply in price, other food items fell in price over the month.

While the summer drought diminished some harvests, other produce benefited from the prolonged sunshine, helping to bring down prices for fruit such as strawberries, blueberries and tomatoes.

Overall shop price inflation rose to 5.7% in September, up from 5.1% in August. That marks a new record since the BRC-NielsenIQ index began in 2005.

Non-food inflation also rose, driven by gardening, DIY and hardware products which were hit hard by an increase in transport costs.

Find out why food prices are also on the rise.

Weak pound

Helen Dickinson, Chief Executive of the BRC, said the plunge in the value of the pound was adding to pressures on retailers.

The pound touched a record low against the dollar on Monday, after a pledge of further tax cuts by Chancellor Kwasi Kwarteng and worries about higher interest rates knocked investors' confidence.

"Retailers are battling huge cost pressures from the weak pound, rising energy bills and global commodity prices, high transport costs, a tight labour market and the cumulative burden of government-imposed costs," said Ms Dickinson.

"And, with business rates set to jump by 10% next April, squeezed retailers face an additional £800m in unaffordable tax rises. Government must urgently freeze the business rates multiplier to give retailers more scope to do more to help households."

Mike Watkins, head of retailer and business insight at NielsenIQ, said: "With food and household energy prices continuing to rise, it's no surprise that NielsenIQ data shows that 76% of consumers are saying they expect to be moderately or severely affected by the cost-of-living crisis over the next three months, up from 57% in the summer.

"So households will be looking for savings to help manage their personal finances this autumn and we expect shoppers to become more cautious about discretionary spend, adding to pressure in the retail sector."

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