February rise in food prices largest for 10 years as inflation soars - BBC

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Food prices saw their largest rise in February for 10 years as inflation continued to soar, according to official figures.

Prices rose by 6.2% in the 12 months to February - the fastest for 30 years - as fuel, energy and food costs surged.

Soaring costs are squeezing household budgets, laying bare the challenge the chancellor faces ahead of his spring spending statement.

Chancellor Rishi Sunak faces growing calls to offer more support.

Prices are rising faster than wages and the Bank of England thinks inflation could hit double digits this year if energy prices continue to rise.

There is speculation Mr Sunak could cut fuel duty, boost benefits and raise the threshold for National Insurance when he sets out his Spring Statement later on Wednesday.

Inflation is the rate at which prices rise. If a bottle of milk costs £1 and that rises by 5p, then milk inflation is 5%.

Since December last year, prices have been rising at their fastest rate since the 1990s.

Helen Dickinson, chief executive of the British Retail Consortium, said: "Rising inflation remains a significant concern for the economy, squeezing household incomes and increasing cost pressures on retailers."

Inflation is expected to accelerate in April when the energy price cap is increased. This will push up the average household fuel bill up by £693 a year in England, Scotland and Wales, while a planned rise in National Insurance will also put pressure on household budgets.

• Why are prices rising so quickly?
• How could Rishi Sunak's plans affect you?

In February, gas prices were almost a third higher than a year earlier, and electricity prices were up by nearly a fifth, the Office for National Statistics (ONS) said.

Petrol and diesel price rises also pushed up the cost of living - February had the highest average diesel price recorded by the ONS - while clothes and footwear, furniture, and food and drink also rose in price.

Grant Fitzner, chief economist at the Office for National Statistics (ONS), said prices had risen for a wide range of goods and services, from food to toys and games.

"Clothing and footwear saw a return to traditional February price rises after last year's falls when many shops were closed.

"Furniture and flooring also contributed to the rise in inflation as prices started to recover following new year sales.

"The price of goods leaving UK factories has also been rising substantially and is now at its highest rate for 14 years."

Cost pressures

As pandemic restrictions have eased around the world, firms have faced higher energy, shipping and wage costs, which they have passed on to consumers.

Russia's invasion of Ukraine has also led to higher prices for oil and other commodities.

Andrew Selley is chief executive of Bidfood, one of the largest UK food wholesalers, which supplies more than 45,000 caterers and food firms.

He told the BBC's Today programme that food prices were rising fast. "We're seeing much bigger increases on things like cooking oil, chicken, cheese, butter. Nothing exotic - these are standard food staples and we're seeing much bigger increases in those at the moment."

Mr Selley said that compared with last year the price of diesel was up by 40%, while "if I look at our electricity price that's 250% up on last year and those two things together make up over 10% of our total costs".

He added that a cut in fuel duty would help. "I mean, fuel is obviously a driver across the whole industry, both from getting it from the farmer to the manufacturer, from the manufacturers to ourselves and from ourselves to the customers, so any relief on fuel would help to mitigate some of those increases coming through."

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2022-03-23 08:16:57Z
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