Food inflation eases slightly in May

In May, food inflation eased slightly as lower energy and commodity costs finally revealed signs that consumers would be more inclined to buy food.

In the month, grocery inflation fell to 15.4 per cent, down from 15.7 per cent in April, according to British Retail Consortium data.

As supply issues eased and weather improved, fresh food inflation also dropped to 17.2 per cent, down from 17.8 per cent in April. This is below the average rate of 17.3 per cent in the three-month period.

Fierce competition between supermarkets has helped keep British food among the cheapest of the larger European economies, said Helen Dickinson, the chief executive of the British Retail Consortium.

Although some goods eased, shoppers still saw the cost of ambient food such as tinned goods rise during the month, topping 13.1 per cent up from 12.9 per cent.

While reports suggest food inflation may have peaked, British households are still struggling with an increase in the cost of living, with rumours suggesting that Downing Street may introduce a cap on food staples to help families with price hikes.

The scheme, which is known to be at the drawing board stage in Number 10, will ask retailers to charge to the lowest possible price for household basics like bread and milk.

Food inflation is much more resilient and difficult to get rid of than we anticipated, said a government treasury source, who first reported the news.

It is believed supermarkets would be allowed to choose which items they cap and would only take part in the scheme on a voluntary basis.

Mr Opie, BRC's director of food and sustainability, said he was sceptical about the plans working.

This will not make a jot of difference to prices. The soaring cost of energy, transport, and labor, along with higher prices paid to food producers and farmers, he said, is a direct result of high food prices.

As commodity prices drop, many of the costs keeping inflation high are now caused by the muddle of new regulations coming from the government. Instead of reviving 1970 s-style price controls, he said, the government should focus on cutting red tape so that resources can be directed to keeping prices as low as possible.