Fears over growing food inflation increased today after figures from Asda’s Income Tracker showed the cost of an essential basket of goods and services rose by 4.2% year on year in January.
The figures show the fastest rise in the cost of essentials since March 2024, and come with Ofgem announcing today that the typical household energy bill will rise by £111 per year in April.
Asda said inflation in its survey, collated by CEBR, had risen to a 10-month high of 3% in January, driven largely by faster price rises in transport, as well as food and non-alcoholic beverages, with prices of staple products such as bread, cereals and meat products particularly impacted.
The average household disposable income for January reached £254 per week, an increase of £25.74 since last year. However, while gross income growth remained above inflation, its growth has slowed month on month.
Asda said the lowest-earning households (approximately 20% of all UK households) were most affected by rising inflationary pressures, facing a shortfall of £69 per week in January.
Sam Miley, managing economist and forecasting lead at CEBR, said: “Inflation accelerated to a near-term high of 3.0% in January. Given that the change in the rate of price growth was particularly stark across essential spending categories, such as food and transport, households have experienced some pressure on their costs at the start of the year.
“Nevertheless, household incomes are growing at a faster pace than prices, and this trend is expected to persist throughout 2025 as households continue to recover from the worst of the cost of living crisis.”
No comments yet