UK’s Food Price Crisis Drives Sharpest Jump in Breakfast Index (From Bloomberg)
~ Monday, June 26, 2023 Blog Post ~
By Katie Linsell, April 20, 2023
- Average fry-up cost jumps the most since index started in June
- Price of milk increased 40% from year earlier, 33% for bread
The price of a full English breakfast jumped to a new high as stubborn food price inflation makes life harder for British consumers.
The average cost of ingredients to make a traditional fry-up soared almost 23% from a year earlier in March. It’s the biggest increase since Bloomberg started the Breakfast Index in June and reflects Britain’s struggle to curb the steep rise in food prices.
The index analyzes data from the Office for National Statistics, including the prices of sausage, bacon, eggs, bread, butter, tomatoes, mushrooms, milk, tea and coffee. It gives a glimpse into the everyday impact of food inflation on shoppers.
“Overall prices are still increasing at their highest level for over a decade, as manufacturers continue to pass on their costs through the supply chain to end customers,” said Lisa Hooker, industry leader for consumer markets at PricewaterhouseCoopers LLP.
Food and non-alcoholic drink price inflation hit a 46-year high of 19.1%, the ONS said Wednesday. With the UK’s broader inflation rate remaining in double digit figures, investors are pricing in further rate hikes from the Bank of England, extending the quickest tightening cycle in four decades. Inflation stood at 10.1% from a year earlier in March.
In the Breakfast Index, the biggest rises from a year earlier in March were in milk, bread and eggs, showing that staples bear the brunt of inflation. Using product sizes provided by the ONS, such as a dozen eggs or a pint of milk, the total cost has risen by almost £6 ($7.45) from a year earlier to £35.51.
Still, there are more recent signs that inflation is easing in some categories. This month supermarkets including Tesco Plc, J Sainsbury Plc, Asda, Aldi, Lidl and Ocado have all lowered the price of milk, as they pass on some deflation to consumers. The price of a pint of milk has fallen to 90 pence from 95 pence and two pints have been cut to £1.25 from £1.30.
Tesco is also seeing some deflation in areas such as oils and grains that could lower prices in baked goods, even as rice and proteins are still rising sharply, Chief Executive Officer Ken Murphy said last week.
On a monthly basis, inflation in the Breakfast Index appears to be slowing. The price of eggs, mushrooms and tea bags all fell in March from a month earlier while butter, milk and bread were unchanged.
“With food price inflation likely to slow in the coming months as we enter the UK growing season, we expect wider inflation will continue to ease,” said Helen Dickinson, chief executive of the British Retail Consortium. “Nonetheless, prices for consumers will remain high, especially as household bill support is lifted.”
— With assistance from Eamon Akil Farhat.
©2023 Bloomberg L.P.
Sources:
https://www.bnnbloomberg.ca/uk-s-food-price-crisis-drives-sharpest-jump-in-breakfast-index-1.1909962
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