Consumer price inflation peaks as food prices soar

No comments

Consumer prices soared in the 12 months to September, driven by rising food and beverage prices.

The consumer prices index (CPI) rose 10.1% in the year-long period, up from 9.9% in August, and returning to the same level as in July.

Consumer prices reached a peak in July 2022 of 10.1%, which was the highest annual CPI inflation rate in the national statistic series since records began in January 1997.

This uptick in inflation was attributed to soaring food prices, according to the latest data from the Office for National Statistics (ONS).

Food and non-alcoholic beverage prices rose by 14.6% in the 12 months to September, up from 13.1% the previous month.

The annual inflation rate continued to rise for 14 consecutive months, up from -0.6% in July 2021.

The increase in prices of household goods and furniture also contributed to the overall rise.

Strategic report: Aldi raising prices quicker than grocery rivals, exclusive data finds

The annual rate of inflation for furniture and household goods rose to 10.8% in September 2022, from 10.2% in August.

Prices in the month of September alone rose by 1.5%, compared to 0.9% a year earlier.

PwC economist Jake Finney commented: “UK consumer price inflation edged slightly higher to 10.1% in September, returning to the high reached in July. This means that the UK is only the second G7 economy to record double-digit inflation, alongside Germany where inflation is at 10.9%.

“Food and drink prices made the largest contribution to the headline rate, where inflation now stands at 14.5%. This is the highest annual rate of food price inflation since the ONS started collecting records in the late 1980s. Low-income households will be most affected by rising food prices, as they spend proportionally more of their expenditure on food than higher earners.

“Looking forward, the outlook for inflation will depend primarily on the size and shape of the energy price guarantee from April 2023 onwards following the government’s review. Removing the energy price guarantee for all households would save the public purse substantial sums but could add around 3-4 percentage points to inflation for much of 2023, as average energy bills potentially exceed £4,000.”