HomeNews UK'Eye-watering' cost of regulation to blame for surging food prices, Treasury told

‘Eye-watering’ cost of regulation to blame for surging food prices, Treasury told

It comes as the Bank blames rising food and other commodity prices on “almost all” of the unexpectedly high inflation over the past few months.

The bank believes that food costs, which have grown at their fastest rate in 45 years, will continue to rise for the rest of the year.

In its latest economic outlook, Threadneedle Street said: “Food price inflation is likely to decline more slowly than previously expected.

“The current short-term forecast for food inflation in the UK does not include any moderate decline in food prices, but only a slower pace of inflation.”

Bank governor Andrew Bailey has tried to reassure households that the peak of inflation has passed, although he is uncertain when weekly shopping costs will drop.

“Energy prices have fallen from their peak and that will start to happen as inflation gets lower,” he said.

“Food price inflation should also ease, although we may be uncertain about when.”

Despite soaring food prices, Mr Bailey said he doesn’t think supermarkets and other grocers are taking advantage.

Speaking to the BBC, he said: “It really doesn’t look like that’s going to happen.”

The Office for National Statistics said last month it expected to see a drop in global food prices reflected in supermarkets “but we’re not there yet”.

Supermarket and food executives have grown increasingly frustrated by claims they are not lowering prices fast enough, with the chief executive of Magnum and Marmite maker Unilever angrily denying the allegations earlier this month.

In a heated exchange with the media, Alan Jope told reporters: “I know it’s a harsh truth, but we are not profiting in any way, manner or form. “

The Sainsburys have also denied claims they are holding prices higher than necessary. Chief executive Simon Roberts earlier this month said Britain’s second-largest supermarket was doing “all it could” to contain inflation.

Prices for milk, bread and butter have all fallen at major supermarkets as wholesale prices for milk and wheat have fallen, although the costs at the checkout are often still significantly higher than they were before the war in Ukraine.

The Treasury Department said it had “listened to the industry’s views on the causes of food inflation and agreed that the industry will continue to engage with senior government ministers on this and its impact.” it’s to the consumer”.

Helen Dickinson, chief executive of the British Retail Consortium, said the meeting was “very constructive”.


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