UK food inflation slows down but high prices remain on shelves

24 May 2023 --- UK food prices edged down in April, the first drop in food inflation since December 2022. Prices increased 19%, compared to 19.1% last month, as falls in bread, cereals, fish, milk, cheese, eggs, sugar, jam and honey helped stabilize the country’s food basket costs.

“Consumers will welcome the fall in headline inflation and while food inflation figures remain high, we are starting to see the price of some essentials begin to come down, including milk and butter, as lower commodity and energy prices begin to filter through,” says Helen Dickinson, chief executive of the British Retail Consortium.

“However, even as inflation eases, consumers should not expect prices to return to the levels of 2021,” she underscores.

UK food inflation peak?
Dickinson said in March that some price relief might come in the next few months as the UK enters its growing season.

Furthermore, supermarkets have removed purchasing caps as the country is no longer suffering from a shortage of fruit and vegetables.

The UK is no longer suffering from a shortage of fruit and vegetables.“With food inflation looking like it may be peaking, the government should avoid creating unnecessary new regulatory burdens that might put this at risk. From new packaging costs and a deposit return scheme, to new Windsor framework labeling and food advertising regulations, the government would do well to minimize the cost-impact of new policy initiatives,” she explains.

The Obesity Health Alliance delivered letters to UK political parties yesterday, asking them to commit to addressing the high levels of excess weight in the country’s population, which include increasing the regulations around junk food advertising.

Sharper slowdowns abroad
The 0.1% decline in UK’s food inflation is not as significant as in other countries, which have seen more significant drops in their inflation rates.

Germany’s food prices have slowed from 21.2% to 16.8% in April. In the broad Eurozone, the rate has declined from 17.5% to 15%. Meanwhile, in the US food inflation has eased from 8.5% to 7.7%, in China from 2.4% to 0.4%, in Brazil from 7.3% to 5.9% and in India from 4.8% to 3.8%.

Food commodity prices might also offer further relief in prices, with the UN Food and Agriculture Organization food price index being at July 2021 levels. 

Moreover, the extension of the Black Sea Grain Initiative, agreed last week, will help to lower the prices of global food baskets. 

However, some countries are on the opposite trend, with inflation still surging, such as Japan, experiencing the highest food inflation since 1976 (7.8%) or Argentina, where food prices rose 115% in April from a year earlier.

By Marc Cervera

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