Food inflation hits highest level in 45 years

By Gwen Ridler

- Last updated on GMT

Food inflation hits its highest level in 45 years
Food inflation hits its highest level in 45 years

Related tags Inflation

Food and drink inflation accelerated to 18.2% in the year to February 2023, the highest level of inflation in the past 45 years, according to the latest figures from the Office of National Statistics (ONS).

During the reported period, 72% of food and drink manufacturers said they had to absorb rising costs, compared to 56% of all companies across the UK and 53% of food retailers.

The Food and Drink Federation (FDF) said these figures suggested the food and drink industry had been disproportionately impacted by the rise in input costs during the pandemic and war in Ukraine compared to the average UK business.

Indicative modelled estimates suggested that the rate would have last been higher in August 1977, when it was estimated to be 21.9%.

Vegetables root cause

ONS attributed the continued increase of food and drink inflation to price movements from ‘8 of the 11 detailed classes’ with no offsetting downward pushes. The largest upward effect came from vegetables, where prices rose significantly in the month to February 2023 by more than a year earlier.

The annual rates in February 2023 for bread and cereals, chocolate and confectionery, other food products – principally ready-meals and sauces – and hot beverages were all at their highest since at least 2008.

FDF chief executive Karen Betts said the ‘disappointing news’ reflected the continued and significant pressure the food and drink sector is under as businesses grapple with persistent cost rises.

‘More the Government can do’

“We welcomed Jeremy Hunt’s pledge to halve inflation this year made in last week’s budget but there’s certainly more the government can do to help our sector achieve this,”​ she continued. “The agreement of the Windsor Framework is a strong step forward, and implementing these new rules in a pragmatic way will be important. 

“However, the lack of ambition in the government’s plans to regulate further for the recycling of plastics and packaging in the UK is worrying – if they are not adjusted in line with international best practice, they will stifle much-needed investment and risk failing consumers, businesses and the environment while pushing up costs.”

Meanwhile, members of the food and drink industry have broadly welcomed the Chancellor’s Spring Budget,​ but questions were raised regarding the viability of the Apprenticeship Levy, the Government's ability to tackle the labour crisis and regulatory burdens.

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