Steve Hawkes
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Food price inflation has surged to a record 9.5 per cent in the year to July as supermarkets pass on higher energy and transport costs to their customers.
The British Retail Consortium (BRC) today said that shop prices rose by 3.2 per cent across the high street in July — the highest rate since it started the index two years ago and up from 2.5 per cent in June.
Food prices were 9.5 per cent higher compared with July last year, against 7 per cent in June.
Experts said the figures would put more pressure on the Bank of England to control inflation. The Bank's Monetary Policy Committee, which begins its two-day rate setting meeting today, is widely expected to keep borrowing costs on hold at 5 per cent.
Howard Archer, chief UK and European economist at Global Insight, said a rate cut may not be possible until 2009 because of the fear that a reduction would fuel yet more inflationary pressure in the economy.
He said: “The Bank of England remains tightly trapped between the rock of rising inflation and the hard place of markedly slowing economic activity.
“Going forward, we expect muted consumer spending to increasingly dilute retailers’ pricing power and ultimately facilitate interest rate cuts.”
The BRC insisted that retailers' costs were rising faster than prices charged in the stores.
Non-food prices were 0.1 per cent higher in July with the cost of furniture and floor coverings up 2.5 per cent on a year ago.
Stephen Robertson, director general of the BRC, said: “Falls in the prices of oil and some world food commodities, such as wheat and soya, provide hope but most retail costs remain sharply up on a year ago and are still rising.”
The figures come a day after PricewaterhouseCoopers claimed that consumers were expected to cut spending on groceries, electronics and eating out over the coming year to cope with the rising cost of living.
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I'm sure if Mr Brown were to work out the figures I'm sure he would come up with 1.5%
Mark, Leeds,
Kevin, London savers have been subsidising borrowers for the last decade with low interest rates just so that greedy borrowers could take their cheap credit and make money out of buy to let and property speculation. Rate cuts devalue Sterling and cause inflation and got us into this mess!
chris, brighton,
People consider the Victorian times with incredulity. It was a difficult time, with harsh demands on the worker and immoral business ethics - today we can't comprehend that such a society existed. In 100 yrs time people will look back at us in exactly the same way. Except the Victorians had guts
Barney, Liverpool, Getthehellouttahere
Everyone suffers through low rates. Stirling falling has pushed up the price of everything for rich and poor alike.
Debt and Inflation are the problems.
Repayment and higher rates the only cure, but still New Labour squirms and procrastinates while looking for another free lunch.
Michael, Bay of Plenty, New Zealand
If all consumers reduced their purchases, food price inflation would fall. Get back to buying only what is necessary and avoid the corner shop. Starting a vegetable garden is another way to reduce food púrchases. Chocolate bars, alcohol and soft drink could chopped from the shopping list.
Jim Wills, Brisbane, Australia
A.Williams, Cradley Heath,
£100??? More like £300!!!!
You get this in cash just before xmas and then spend it on presents/xmas goodies, putting it back into the economy. It should be given in fuel-only/name-only redeemable vouchers!
Don't deny it, my wife sees it every year in her job!
Darren Ward, Manchester, UK
And what about house price inflation? You add that to the picture as well and the UK economy is completely out of control, and its about time the BoE controlled it with rate rises.
Joe, Manchester,
how is it some people are calling for a rate rise which would mean cash strapped families would have even less.no doubt these greedy people have got cash in the bank and want bigger returns at expense of the worse off
Kevin, London, England
During the house price boom, I always used to think - a house is just somewhere to live, a basic necessity - would the media get so bubbly and excited if the price of milk was soaring?
Here it comes - ole!
Michael, Pilsen,
People who haven't borrowed recklessly are being punished by the BoE. Inflation is out of control. The BoE should raise rates immediately.
Simon, London, UK
This high rise in the price of food over the past year shows exactly how heavily dependent the UK is on food imports and how the devaluation of Sterling - Harold Wilson, 1967 all over again - is making everyone worse off.
Paul, Coventry,
The sooner they raise rates and get inflation under control the better, as for "Billy no mates" Brown, what on earth does he think that by giving a "stamp duty holiday" that all the housing industries problems will be solved? Half the problem is the cost of housing...
Graham , Littlehampton,
Reduce fuel tax.
Virtually every price rise is blamed on higher fuel costs.
Mr Brown can't be that stupid or greedy, can he?
Mike, Sole Street, England
Mr Archer doesn't realise that retailers input costs are rising so fast that they cannot reduce prices. Retail prices will go up or retailers will go bust. Inflation is looming and The Bank will have no choice but to raise interest rates as long as their sole remit is to control inflation.
Grant.
grant williams, shrewsbury, shropshire
And all of this is so easy to cure - reduce fuel taxes to reduce the price of energy and transport costs. But wait! "Prudence" Brown has squandered all of our wealth, so this isn't possible. No wonder he "feels" our pain and "understands our problems", he should do, HE HAS CREATED THEM!!!!!!!
Dave, Manchester,
Food price inflation 9.50%, heating oil up 100%, petrol up 35%, Council tax up 5%, bus fares up 15%(so far) coal up 28%.
These are the things we pensioners spend our money on so the £100 extra fuel allowance goes no where. Pension increase? I guess 1.90% knowing the Brown/Darling philosophy.
A.Williams, Cradley Heath,