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Experts say food inflation has peaked and will continue to fall

Food prices fell on the previous month for the first time in more than two years according to figures released by the British Retail Consortium (BRC) this week – but the prices of different foods don’t all move at the same pace.

One category of food that has seen massive price fluctuation in the past year, is fruit and vegetables.

Back in May, cucumbers were a symbol of high inflation – having risen in price by more than 50 per cent in the previous 12 months – but the rate of increase on the green vegetable has now reversed.

Swedes have gone up by 50 per cent in the year and the second-biggest price riser – according to weekly wholesale data produced by the Government – is the brown onion at 43 per cent.

The biggest faller meanwhile was the turnip, down 41 per cent, while the cauliflower, down by 39 per cent, saw the second-biggest fall.

Cucumbers, once a huge riser, have dropped by 20 per cent in the past 12 months, according to the figures.

Experts have said that food inflation is likely to have peaked, and is set to continue to fall in the coming months.

However, unless food inflation remains negative – which is unlikely in the long-term – prices will merely increase at a slower rate, rather than fall.

Danni Hewson, head of financial analysis at AJ Bell, has said that recent data shows that “consumers might finally have caught a break, but few will notice much of a difference at the till.”

“A fall of 0.1 per cent month on month is tiny and it’s important to remember that if we compare prices today with where they were a year ago, things look very different,” she added.

And Alistair McQueen, head of savings and retirement at Aviva said: “Food and drink represents about 13 per cent of a typical household weekly budget. This is the biggest single category of expenditure for a typical household, after utilities and transport. So, food inflation at today’s levels continues to represent strain on household finances. This is despite indications of a recent easing in prices.

“Over recent months the primary source of inflationary pressure has shifted from heating to eating. Food inflation remains very high, and it is a pressure we cannot easily avoid. We have to eat. The ‘cost of eating crisis’ is not yet over.”


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