UK Food Price Inflation Soaring
The RPI rate of inflation fell to 0% in March latest figures reveal. Cool, people might be getting their pay frozen, but at least prices in the shops aren't going to go up either so we can still afford to eat right?
Erm, well it might be a little more complicated than that. The RPI data, crucially, includes housing costs. Data from the British Retail Consortium (BRC) reveals that food inflation was 9% in February and March, up from 7.5% in January and 6.2% in December. Meanwhile the cost of non-food items fell by 1.5% in March, adding to a 1.7% drop in February. Clearly combining non-food items and housing costs in with food items is distorting the look of the RPI.
The BRC say that the weak pound is the reason for food prices increasing as retailers are paying more to their suppliers. I can think a few industries that would like to take issue with the BRC on that one.
Meanwhile UK dairy product retail prices according to DairyCo:
So farmgate milk prices are falling month-by-month, whilst food prices in the shops are rising steadily and people are losing their jobs or taking pay freezes. Meanwhile farmers are quitting the industry left right & centre with milk production is at its lowest in 34 years and continuing to fall.
Sounds like a recipe for disaster to me. Still, we can all eat our mobile phones if we're hungry. I can just picture us next Christmas, tucking into Widescreen Plasma TV with all the trimmings.
"These roasted DVD's are lovely, did you burn them yourself?"
"Nah, I got them from Asda, fancy another Nokia, Roy?"
"I'd better not, I've had two already & I'm driving."
Erm, well it might be a little more complicated than that. The RPI data, crucially, includes housing costs. Data from the British Retail Consortium (BRC) reveals that food inflation was 9% in February and March, up from 7.5% in January and 6.2% in December. Meanwhile the cost of non-food items fell by 1.5% in March, adding to a 1.7% drop in February. Clearly combining non-food items and housing costs in with food items is distorting the look of the RPI.
The BRC say that the weak pound is the reason for food prices increasing as retailers are paying more to their suppliers. I can think a few industries that would like to take issue with the BRC on that one.
Meanwhile UK dairy product retail prices according to DairyCo:
Product Mar09 Mar08 % Chg
Liquid Milk 4 Pint Polybottle 153p 134p +14.1
Fresh Cream Double Milk 586ml 168p 161p + 4.3
Butter, Country Life, 250g 96p 96p unch
Cheddar, English Mild, Own Label/kg 661p 608p + 8.7
Cheddar, English Mature, Branded/kg 964p 829p +16.3
So farmgate milk prices are falling month-by-month, whilst food prices in the shops are rising steadily and people are losing their jobs or taking pay freezes. Meanwhile farmers are quitting the industry left right & centre with milk production is at its lowest in 34 years and continuing to fall.
Sounds like a recipe for disaster to me. Still, we can all eat our mobile phones if we're hungry. I can just picture us next Christmas, tucking into Widescreen Plasma TV with all the trimmings.
"These roasted DVD's are lovely, did you burn them yourself?"
"Nah, I got them from Asda, fancy another Nokia, Roy?"
"I'd better not, I've had two already & I'm driving."