The UK’s rate of inflation remained at 3.8% YoY in August, but according to the UK Office for National Statistics, food prices spiked on a month-on-month basis to 5.1%. This figure is above the Bank of England’s 2% target which means it is expected to hold interest rates steady at its rate-setting meeting later this week.
Food inflation hit 5.1% in the 12 months up to August, making the rate the fifth month in a row has climbed. This has meant food inflation has outpaced the minimum wage, with low-income earners having to spend a bulk of their income on food.
Fuel prices also increased on a month-on-month basis in August, with UK residents spending an average of £1.34 per litre on petrol and an average of £1.42 per litre on Diesel.
Drivers of Food Inflation
Food and drink manufacturers have highlighted the increase to employers’ National Insurance Contributions and the new packaging tax as among the key reasons prices have gone up.
Cheese, fish, Beef, Butter, Chocolate, Coffee, Milk and vegetable prices were the most affected as food prices recorded the highest rate in 18 months.
