UK inflation rises to highest level in almost 30 years at 5.4%

[dutchman]

UK grocery price inflation falls at fastest rate on record, research finds



UK grocery price inflation fell at the fastest pace on record in December, according to data from research company Kantar, the latest evidence of a significant retreat in price growth in Britain.

Grocery price annual inflation eased from 9.1 per cent in November to 6.7 per cent in December, marking the fastest month-on-month drop that Kantar has recorded since it started tracking prices in 2008.

The figures published on Wednesday came after British Retail Consortium numbers earlier this week showed December food inflation easing to the same rate, the lowest since June 2022.

Fraser McKevitt, head of retail and consumer insight at Kantar, attributed the decline to promotions being “central” to retailers’ strategy.

He explained that nearly one-third of all spending in the four weeks to Christmas Eve was made on items with some kind of offer, the highest level since December 2020.

Both sets of data pointed to the significant easing of price pressure on British consumers after an inflationary upsurge in recent years that has hit poorest households hardest.

The latest official data for overall UK inflation published last month showed a sharp fall to 3.9 per cent in November, putting pressure on the Bank of England to begin cutting rates from a 15-year high of 5.25 per cent.

Food inflation in November was 9.2 per cent, according to figures from the Office for National Statistics, less than half its 45-year peak of 19.2 per cent in March. The ONS will release December figures on January 17.

Yeah, right!

[dutchman]

Official rate of inflation edges back up to "4%"

Spot the anomaly:

"Housing & bills" excludes the effect of removal of the energy bills subsidy so it appears to have fallen and dragged down the overall rate of inflation when in reality it has risen.

That effect however will gradually reduce over the coming months and the official figure will return to something closer to people's actual experience.

[rebbonk]

Official rate of inflation edges back up to "4%"

Sunak didn't seem quite so keen to take responsibility for this in PMQs.

[dutchman]

In case anyone is living under a rock and hasn't noticed:

Supermarket favourites victims of shrinkflation, consumer group Which? says



Supermarkets and manufacturers must be more open about so-called "shrinkflation" and "skimpflation", consumer group Which? says.

Which? said it was inundated when it asked shoppers for examples of products which were smaller or had fewer key ingredients.

It included boxes of tea bags and sausages with less pork.

The British Retail Consortium says retailers are trying to limit rising prices as production costs increase.

Which? picked out the following examples of shrinkflation:

• Listerine Fresh Burst mouthwash shrank from 600ml to 500ml. At Tesco it also went up in price by 52p
  
• PG Tips Tasty Decaf Pyramid tea bags went from containing 180 bags to 140 at a number of supermarkets
  
• Kettle Chips Sea Salt and Crushed Black Peppercorns Crisps shrank from 150g to 130g at Tesco
  
• Yeo Valley Organic Salted Spreadable went from 500g to 400g at Sainsbury's and Tesco

It also found recipes for other products were altered to include fewer expensive ingredients:

• In Sainsbury's 'Clotted Cream Rice Pudding', the clotted cream was replaced with whipping cream in its entirety. It has since been repackaged
  
• Morrisons 150g guacamole lost some avocado, from 80% of its recipe to 77%
  
• The amount of beef in a 1.5kg Tesco Beef Lasagne dropped from 23% to 19%
  
• Waitrose Butter Chicken Curry lost some of its chicken content from 47% to 41%

Which? acknowledges that the changes have all come at a time when food inflation has soared. According to their food inflation tracker, year-on-year price rises peaked last April at 17%.

The consumer group said the research showed shoppers are often paying more for less.

"Supermarkets and manufacturers must be more upfront by making sure changes to popular products are clear, and by ensuring that unit pricing is prominent, legible and consistent in-store and online so that shoppers can easily compare prices across different brands and pack sizes," retail editor for Which?, Ele Clark said.

Director of food and sustainability at the British Retail Consortium, Andrew Opie, said nearly all of the examples identified by Which? reflected decisions by the manufacturers, rather than the retailers.

"Nonetheless, given the challenges facing households from the cost of living squeeze, retailers are solely focused to find ways to limit rising prices for customers against the rising cost of production, while maintaining the excellent quality of products," Mr Opie said.

"Prices and sizes of all products are clearly labelled so that customers can make informed decisions about their purchases."

[dutchman]

PG Tips Tasty Decaf Pyramid tea bags went from containing 180 bags to 140 at a number of supermarkets

Also regular PG Tips has been replaced by Liptons while the original is now sold as "PG Tips Gold" and costs a lot more!

[dutchman]

Supermarket sandwich prices to jump



Supermarket sandwiches are to become more expensive as a looming rise in minimum wage puts up the cost of making them.

Greencore, the UK’s biggest sandwich maker, said on Thursday it would need to increase its prices when the National Living Wage increases by £1 an hour in April.

The company produces 779 million sandwiches a year and supplies most of the major supermarkets, including Sainsbury’s, Marks & Spencer and Co-op.

Greencore chief executive Dalton Philips said: “We’re hugely supportive [of wages rising], because if you can get wages moving again, that’s going to ultimately put more money in people’s pockets. But the reality is, on our wage bill, it is a material increase.”

The National Living Wage will rise to £11.44 from April in the biggest cash increase since the minimum wage was created in 1998. Mr Philips said the increase will add around £30m to Greencore’s costs.

He said: “Obviously you do everything you can to mitigate it by operational efficiencies and all the good work that all companies try. But at the end of the day, it’s £30m, and you can’t mitigate it all. And some of that does seep into price rises.”

Supermarket sandwiches are to become more expensive as a looming rise in minimum wage puts up the cost of making them.

Greencore employs around 13,600 people across 16 factories in the UK. As well as making hundreds of millions of sandwiches, it makes around 25 million packs of sushi and 132 million chilled ready meals every year.

Supermarkets ultimately set the price of the goods they sell. However, a rise in what Greencore charges may well be passed on to shoppers.

The likely increase threatens to reverse the recent slide in food inflation. Grocery inflation dropped from 7.7pc to 6.7pc last month, according to the British Retail Consortium.

Industry bosses have warned that they face significant increases in costs in the months ahead that threaten to push up prices. As well as the rise in minimum wage, business rates are also set to climb and new border checks will add to costs.

Helen Dickinson, chief executive of the BRC, said earlier this month: “Government should think twice before imposing new costs on retail businesses that would not only hold back vital investment in local communities, but also push up prices for struggling households.”

Mr Philips said despite the cost-of-living crisis, shoppers were increasingly opting for pricier, premium sandwiches.

[dutchman]

Food prices drop for first time since 2021 as inflation remains unchanged in January



The rate of inflation remained unchanged at 4.0% last month despite economists forecasting it would rise, the Office for National Statistics has said.

The ONS said food prices fell on a monthly basis for the first time since September 2021, and the largest downward push on inflation came from furniture and household goods.

However, inflation still remains well above the Bank of England’s 2.0% target.

ONS chief economist Grant Fitzner said: “Inflation was unchanged in January, reflecting counteracting effects within the basket of goods and services.

“The price of gas and electricity rose at a higher rate than this time last year due to the increase in the energy price cap, while the cost of second-hand cars went up for the first time since May.

“Offsetting these, prices of furniture and household goods decreased by more than a year ago and food prices fell on the month for the first time in over two years.

“All of these factors combined resulted in no change to the headline rate this month.”

Chancellor Jeremy Hunt said: “Inflation never falls in a perfect straight line, but the plan is working; we have made huge progress in bringing inflation down from 11%, and the Bank of England forecast that it will fall to around 2% in a matter of months.”

Shadow chancellor Rachel Reeves said: “After 14 years of economic failure working people are worse off. Prices are still rising in the shops, with the average household’s costs up £110-a-week compared to before the last election.

“Inflation is still higher than the Bank of England’s target and millions of families are struggling with the cost of living.

“The Conservatives cannot fix the economy because they are the reason it is broken. It’s time for change. Only Labour has a long-term plan to get Britain’s future back by delivering more jobs, more investment and cheaper bills.”

[dutchman]

The ONS said food prices fell on a monthly basis for the first time since September 2021

Of course they have, I was thinking only yesterday how much cheaper my food shop was than three years ago!

the largest downward push on inflation came from furniture and household goods

What, furniture stores had a 'SALE' in January?

[dutchman]

I'll hazard a guess shop prices shot up today as the latest so-called 'cost-of-living' handouts landed in people's bank accounts?

[dutchman]

Inflation drops to lowest level in more than two years

Inflation has eased to its lowest level in almost two and a half years, paving the way for interest rate cuts this summer.

Prices, as measured by the consumer price index (CPI), rose by 3.4pc in the year to February, according to the Office for National Statistics (ONS), down from 4pc in January.

The drop is slightly greater than analysts’ expectations of a fall to 3.5pc, and it marks the first time that inflation has fallen to this level since September 2021.

Statisticians said the fall was driven by food prices, which were almost unchanged on a monthly basis compared with a “large rise” the previous year.

On an annual basis, food and drink prices were up 5pc, down from 7pc in January and the lowest annual rate since January 2022.

Grant Fitzner, the ONS’s chief economist, said price rises at restaurants and cafes also slowed.

He added that costs were easing across a range of goods and services: “The general trend continues to be lower.”

Wednesday’s figures also revealed that core inflation fell faster than expected to 4.5pc from 5.1pc in January, while services inflation, which the Bank is watching closely, eased to 6.1pc from 6.5pc, although this was slightly higher than expected.

Commenting on the figures, Chancellor Jeremy Hunt insisted “the plan is working”.

He said: “Inflation has not just fallen decisively but is forecast to hit the 2pc target within months.

“This sets the scene for better economic conditions which could allow further progress on our ambition to boost growth and make work pay, by bringing down national insurance as we work towards abolishing the double tax on work – but only if we can do so without increasing borrowing or cutting funding for public services.”

Rachel Reeves, the shadow chancellor, said: “After 14 years of chaos and uncertainty under the Conservatives, working people are worse off. Prices are still high, the tax burden is the highest it has been in 70 years and mortgage payments are going up.”