Top story
UK food inflation accelerated to 3.3% in January, its highest rate in almost a year.
Butter and olive oil saw some of the biggest hikes, up 18.3% and 16.6% respectively.
Food inflation hit a low of 1.3% in August but has since been steadily climbing.
“Unfortunately, this month isn’t likely to be a flash in the pan for rising food and drink prices,” said Balwinder Dhoot, director of industry growth and sustainability at the Food & Drink Federation.
“We’re yet to see the full impact of increasing labour costs, with changes to both national minimum wage and National Insurance contributions coming into force in April.”
Prices fell fastest on pasta and couscous (down 5.9%) and jams and marmalades (down 3.2%).
The overall consumer prices index (CPI) rose to 3% in January, up from 2.5% in December, according to the latest data by the Office for National Statistics. Economists expected it to climb to 2.8%.
Luke Bartholomew, deputy chief economist at Abrdn, said: “Inflation was always going to jump higher today, but the size of the increase is a bit of disappointment.”
The Bank of England forecasts inflation will rise to 3.7% in the middle of the year, fuelled by higher global energy costs hitting utility bills.
A greater rise could give it pause for thought about cutting rates more aggressively this year.
“Today’s data underlines the inflationary pressures in the economy right now and the real challenges businesses are facing,” said Stuart Morrison, research manager at the British Chambers of Commerce.
“Firms are having to deal with significant cost burdens which threaten to fuel inflation further.”
New data this week showed UK wage growth accelerated to 5.9% in the three months to December, up from 5.6% in the three months to November.
Dean Butler, a director at the pension firm Phoenix Group, said today’s figures meant “earlier expectations of a smooth ride towards a lower inflation, lower interest rate environment in 2025 have taken another hit.”
Alcohol and tobacco prices were up 4.9% compared with the same month a year ago, down from 5.3% in December.
Morning update:
Arla Foods has hailed 2024 as a “strong year”, with profit and revenue both climbing on the back of positive growth from key brands and “effective cost management”.
The dairy co-op saw group revenues climb by 0.7% to €13.8bn last year, while net profit share of revenue rose from 2.8% to 2.9%, according to its 2024 annual results, published this morning.
Full story here
No comments yet