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

[dutchman]

Beef drives food inflation to highest in a year



Higher beef and fresh produce prices has pushed UK food inflation to an annual high, according to industry data, with the boss of one steakhouse chain telling the BBC the cost of the meat had risen by a fifth.

Food prices rose 2.8% in the year to May, the highest annual rate since May 2024 when food inflation was 3.2%, according to the British Retail Consortium (BRC), which represents supermarkets and other retailers.

Farming industry experts said beef prices in particular have been rising due to high demand and low supply caused by lack of government support.

Tomas Maunier, co-founder of steak restaurant chain Fazenda, said the meat industry faced "tough times".

Mr Maunier, whose Brazilian-inspired steakhouse chain has eight restaurants across the UK, said his firm had passed on about 2% of increased running costs to customers.

"Beef in particular has gone up about 20% in the last 12 months. A big chunk of that has happened in the last six but businesses cannot pass it all on to our guests," he added.

Mr Maunier added that an increase in production costs and an increase in the national minimum wage was also pushing up overall costs, which could be passed onto consumers.

Nick Allen, chief executive of the British Meat Processors Association (BMPA), said competition between supermarkets had previously been keeping the price of beef down, so it was only a matter of time until customers were hit by cost increases.

"Its not surprise. The farm price for beef has been going up and up to the point that its now at record levels," Mr Allen said.

He warned it was a "real struggle" for the industry to keep up with demand for beef, and claimed that "government schemes have not supported production but environmental schemes instead".

Helen Dickinson, chief executive of the BRC, said red meat eaters "may have noticed their steak got a little more expensive" this month.

Jilly Greed, a fourth generation arable farmer and suckler beef producer in Devon, told the BBC: "It is entirely the maths - it's about supply and demand."

"There's a 5% shortfall in cattle on the land, and a 1% increase in consumer demand, and the combination of those factors have really brought price increases," she added.

Ms Greed said price increases have affected the whole supply chain.

"The base product is the highest it's ever been, and sooner or later that has to filter through to the consumer," said Mr Allen.

The Agriculture and Horticulture Development Board, which is funded by farmers and growers, said UK cattle prices have been rising at "unprecedented levels" since the start of 2025.

Its latest beef market update says some of the price rise faced by farmers is feeding through to shoppers - but it said not all of this is being passed on.

[dutchman]

Why is the ONS saying inflation has gone down?

The rate of inflation remained flat at 3.4 per cent in May – still well above the Bank of England’s 2 per cent target. Bizarrely, the Office for National Statistics (ONS), in their figures released this morning, claims this is down from 3.5 per cent the month before, even though just a couple of weeks ago they admitted that figure was overstated due to an error. Because of a policy not to revise inflation figures, that error lives on – leading them to announce the fiction that inflation has fallen. The reality is it has not.

The result of stubbornly sticking to this no-revisions policy is a slew of misreporting about Britain's economy. The Today programme told us inflation was ‘cooling’, and news websites are already parroting the ONS line that inflation has fallen. That may reassure people, but it is a complete fiction. It makes you wonder why the ONS even bothered telling us they’d got the figures wrong last month.

As for what supposedly drove the fictitious fall, the ONS points to air fares being down compared with a large rise at the same time last year – though that previous reading coincided with Easter, when prices tend to surge anyway. So who knows what’s really going on there. Petrol and diesel prices do seem to have come down, but that was offset by rising food prices – particularly chocolate and meat. Furniture and household appliances were up too.

It makes you wonder why the ONS even bothered telling us they’d got the figures wrong last month.

The consensus among economists was that the figure would fall to 3.3 per cent. The fact that it has not makes it very unlikely that the Bank's nine-member Monetary Policy Committee will cut rates when they meet tomorrow. Instead, markets expect them to hold rates at 4.25 per cent before beginning to cut them again in August.

The war in the Middle East continues to threaten to make inflation even stickier as oil and gas prices rise. Professor Joe Nellis, economic adviser at accountancy firm MHA, says this means the Bank might not achieve the 2 per cent target until 2027.

In the end, while the headlines may offer false comfort, the stubborn reality of inflation remains. The ONS’s reluctance to correct its errors risks further undermining trust in official statistics and just makes them look ridiculous. The Bank of England, meanwhile, remains caught between the need for caution and growing pressure to ease rates in the face of a stagnating economy. This is a balancing act that may define the months to come.

https://www.spectator.co.uk/article/why-is-the-ons-saying-inflation-has-gone-down/

[rebbonk]

Having worked with the ONS, I wouldn't **** on them if they were on fire!

[dutchman]

Inflation jumps to 3.6% on fuel and food price pressures



The rate of inflation has risen by more than expected on the back of fuel and food price pressures, according to official figures which have prompted accusations of an own goal for the chancellor.

The Office for National Statistics (ONS) reported a 3.6% level for the 12 months to June - a pace not seen since January last year.

That was up from the 3.4% rate seen the previous month. Economists had expected no change.

ONS acting chief economist Richard Heys said: "Inflation ticked up in June driven mainly by motor fuel prices which fell only slightly, compared with a much larger decrease at this time last year.

"Food price inflation has increased for the third consecutive month to its highest annual rate since February of last year. However, it remains well below the peak seen in early 2023."

A key driver of food inflation has been meat prices.

Beef, in particular, has shot up in cost - by more than 30% over the past year - according to Association of Independent Meat Suppliers data reported by FarmingUK.

High global demand alongside raised production costs have been blamed.

But Kris Hamer, director of insight at the British Retail Consortium, said: "While inflation has risen steadily over the last year, food inflation has seen a much more pronounced increase.

"Despite fierce competition between retailers, the ongoing impact of the last budget and poor harvests caused by the extreme weather have resulted in prices for consumers rising."

It marked a clear claim that tax rises imposed on employers by Rachel Reeves from April have helped stoke inflation.

Balwinder Dhoot, director of sustainability and growth at the Food and Drink Federation, said: "The pressure on food and drink manufacturers continues to build. With many key ingredients like chocolate, butter, coffee, beef, and lamb, climbing in price - alongside high energy and labour expenses - these rising costs are gradually making their way into the prices shoppers pay at the tills."

The wider ONS data is a timely reminder of the squeeze on living standards still being felt by many households - largely since the end of the COVID pandemic and subsequent energy-driven cost of living crisis.

Record rental costs alongside elevated borrowing costs - the latter a result of the Bank of England's action to help keep a lid on inflation - have added to the burden on family budgets.

Most are still reeling from the effects of high energy bills.

The cost of gas and electricity is among the reasons why the pace of price growth for many goods and services remains above a level the Bank would ideally like to see.

Added to that is the toll placed on finances by wider hikes to bills. April saw those for water, council tax and many other essentials rise at an inflation-busting rate.

[dutchman]

High meat and tea costs drive up food prices



Rising meat and tea prices have helped drive up food price inflation for the sixth consecutive month, a survey suggests.

Food prices rose by 4% in the year to July, up from a 3.7% increase in the year to June, according to the latest shop price monitor from the British Retail Consortium (BRC).

The BRC's chief executive Helen Dickinson said tighter global supplies for staples including meat and tea have hit wholesale prices hard.

The new figures echo separate research published last week, which found household grocery bills were on course to rise by £275 this year.

The BRC survey found inflation - the rate at which prices rise - for fresh food including fruit and vegetables remained at 3.2% in the year to July, but inflation for cupboard goods increased to 5.1% over the same period.

Ms Dickinson said families will have noticed their higher food bills.

"Staples such as meat and tea were hit the hardest as wholesale prices for both categories have been hit by tighter global supplies. This has helped push up overall shop prices," she said.

Andrew Keeble, managing director and founder of Heck Sausages, told the BBC's Today programme there had been a "perfect storm" of factors driving up the price of beef and chicken in particular.

He said chicken prices alone have risen in the past two years from £2.85 a kilo to £5.50, driven by a combination of avian flu and lower stock intensity, which has meant reducing the number of chickens in each shed.

"That a good thing, we fully support it but you get fewer chickens in a shed [and] there aren't enough sheds to put it bluntly and that is driving availability prices through the roof at the moment," Mr Keeble said.

He added that his company was trying not to pass on the added costs to retailers, and supermarkets were also trying to keep costs down for shoppers.

However, he said "I think it just gets to the point where this is now actually coming through and that's why you're now seeing those increases."

Mike Watkins, head of retailer and business insight at NIQ, said increasing inflation would concern High Street retailers hoping to retain customers over the summer holiday season.

"Consumers' household budgets are coming under pressure with the food retailers now seeing price increases above CPI," he said.

"However, price competition helped by promotional activity will still mean that shoppers can save money by shopping around.

Ms Dickson said there were "a few bright spots" in the research, "with discounts in fashion and furniture offering consumers a chance to refresh their wardrobe and homes."

[dutchman]

‘Troubling’ inflation stuck at 19-month high



The rate of inflation was stuck at a 19-month high during August, official figures show, ramping up pressure on Rachel Reeves as she prepares to blame the Tories for her Budget black hole.

The consumer prices index (CPI) rose by 3.8pc last month, according to the Office for National Statistics (ONS), which remained at the highest level since January 2024.

The figure is still well above the Bank of England’s 2pc target and will cement expectations that policymakers will not be able to cut interest rates again this year.

Food and drink price rises accelerated for the fifth month in a row amid rising prices for items like vegetables, milk, eggs, cheese and fish.

NIESR associate economist Monica George Michail said the figures “confirm inflation remains entrenched,” while Paul Dales of Capital Economics called the data “troubling”.

Persistent inflation maintains pressure on the Chancellor because the cost of borrowing for the Government is linked to the rate of inflation through many sovereign bonds.

Ms Reeves said: “I know families are finding it tough and that for many the economy feels stuck. That’s why I’m determined to bring costs down and support people who are facing higher bills.”

It comes as economists believe the Chancellor will have to raise taxes by at least £20bn in her Budget on Nov 26 to balance the public finances.

Officials suggested that Labour would attempt to pin Britain’s dire growth performance since the financial crisis on the Tories.

Shadow chancellor Sir Mel Stride said the Government was failing to control inflation.

He said: “Labour’s decision to tax jobs and ramp up borrowing is pushing up costs and stoking inflation – making everyday essentials more expensive.”

Retailers have blamed Rachel Reeves’s tax raid on employers for pushing up food and drink inflation.

Several large retailers and supermarkets said food inflation was worsened by rising business costs – namely employer National Insurance contributions, new packaging taxes and an increase in the national minimum wage.

Food and non-alcoholic drink inflation rose for the fifth month in a row in August, from 4.9pc in July to 5.1pc.

Kris Hamer, director of insight for industry group the British Retail Consortium, said: “Food inflation climbed above 5pc in August for the first time in 18 months as rising employment costs and poor harvests drove up retailers’ costs.

“With food inflation now outpacing wages, many families will be struggling with the rising cost of living.”