Food price inflation in Britain is likely to peak at up to 15% this summer and will remain at high levels into 2023.
The Institute of Grocery Distribution (IGD) said the most vulnerable households in Britain would be hit hardest by the spike in food and drink prices.
Their report out this morning warned that the UK economy is facing its strongest period of inflationary pressure since the 1970s. It also expects food inflation to persist for longer than official forecasters due to several factors, including the impact of the war in Ukraine, pre-existing supply chain challenges and the limited effectiveness of monetary and fiscal policy.
These predictions deliver yet another blow to the most vulnerable households in the UK, who will be hit the hardest by the spike in food and drink prices. IGD has calculated that the average monthly spend on groceries for a typical family of four will reach £439 from January 2023 – a significant increase from £396 in January 2022.
The strongest inflation pressure is expected to come from meat, cereal products, dairy, fruit and vegetables. In particular, products that rely on wheat for feed, such as white meats, are likely to see prices soar in the short term.
IGD predicts that the acceleration in food inflation is likely to last until mid-2023. Additionally, the UK food and consumer goods industry is uniquely exposed to current pressures due to a reliance on food imports and the impacts still being felt from the EU exit.
James Walton, Chief Economist, IGD, said:
“From our research, we’re unlikely to see the cost-of-living pressures easing anytime soon. This will undoubtedly leave many households – and the businesses serving them – looking to the future with considerable anxiety. If average food bills go up 10.9% in a year, a family of four would need to find approximately £516 extra per year. We are already seeing households skipping meals – a clear indictor of food stress.
“We expect the mood of shoppers to remain bleak for the foreseeable future as they are impacted by rising inflation and a decline in real wages. Shoppers are likely to dial up money-saving tactics as far as possible.”
