Food price inflation reaches 45-year high

Share on facebook
Share on linkedin
Share on twitter

Print
[ad_1]

Image Source: Bloomberg

The price of essential foods like milk, cheese, and eggs is going up at the fastest rate in 45 years.

The year-over-year rise in food prices hit 16.2% in October, up from 14.5% in September.

Since 1981, the cost of energy and fuel has also gone up a lot, which has increased the overall inflation rate.

The rising cost of living makes it hard for many people to make ends meet.

The ONS said it was hardest on low-income households because they spent about half of their income on food and energy, while middle-income households spent about a third.

The overall inflation rate in October was 11.1%, the highest rate in 41 years. This is up from September’s rate of 10.1%.

The latest numbers come from Thursday’s Autumn Statement, where Chancellor Jeremy Hunt is expected to say that public spending will be cut and taxes will go up by billions of pounds.

Hunt’s attempt to stop price rise

Mr. Hunt said that his plans would try to stop prices from going up and up. However, he also said that to get the economy back on track, he would have to make “tough but necessary decisions.”

Inflation is a way to measure how much it costs to live, and the Office for National Statistics (ONS) keeps track of the prices of hundreds of everyday items to figure it out.

The ONS said milk, pasta, margarine, eggs, and cereal prices increased sharply in October.

Even though bills went up again last month, gas and electricity prices were still the main reasons for inflation.

The government’s Energy Price Guarantee did slow down these price increases, keeping the average household bill to about £2,500 a year.

But the ONS said that gas and electricity prices were still higher than they were a year ago by nearly 130% and 66%, respectively.

But it said that without help from the government, inflation would have reached as high as 13.8%.

Greg Pilley started the Stroud Brewery & Taproom in Gloucestershire, which sells beer to pubs and shops. He told the BBC that his business’s costs had increased by 10%.

Since last year, the Ukraine war and the COVID pandemic have caused energy and food prices to go up.

As prices have increased, workers in many industries have asked for pay raises to keep up with the cost of living. Some industries, like the railways, have even gone on strike.

But some economists think the inflation rate of 11.1% in October could be the highest.

Paul Dales, the head UK economist at Capital Economics, said prices could go down if the government keeps freezing energy prices.

Interest rates

The Bank of England has raised interest rates to 3% to slow down inflation. It hopes that if people have to pay more to borrow money. They will spend less, demand will go down, and price increases will slow down.

But the cost of mortgages and other loans is rising because rates are increasing.

The UK economy is slowing down because people don’t have as much money to spend. The economy will likely be in a recession by the year’s end.

Read Also: Why the UK government wants to cut spending 

Between July and September, the economy shrank by 0.2%. And the Bank of England warned that the UK is in for a brutal two-year downturn.

When an economy shrinks for two sets of three months in a row, this is called a recession. Likewise, when companies make less money and unemployment goes up, it’s a sign that the economy isn’t doing well.

Inflation is going up in many countries around the world. For example, at 11.6%, the rate in Germany is higher than in the UK, while in the US, prices rose by 7.7% in the year leading up to October.

But the UK’s economy is doing worse than other major countries, and it is smaller than before the COVID pandemic.