If you've been to the supermarket recently, you won't have failed to notice the soaring price of everyday items. British grocery inflation rose to 5.2% in the month to October 5th, according to industry data released earlier this week, which is only adding to pressure being heaped on consumers by higher energy bills.
The figures come from Worldpanel by Numerator (formerly Kantar), and may be a solid indicator that there will be a further rise in the rate of inflation when official UK figures are released next week. Boffins say that the steepest increases are in chocolate, meat and coffee, and there are falls in household paper, sugar confectionery and sparkling wine. I'll drink to that! Perhaps unsurprisingly, spending on offers has hit the highest level in months at almost 30%, and the British Retail Consortium, which looks after the interests of the UK's biggest retailers, predicts that food inflation will hit 6% by the end of the year.
Whilst we're looking at the data, British consumer spending grew by the least in four months in September, and uncertainty ahead of the Chancellor's autumn budget is being cited as a factor., along with soaring utility bills. Lidl and Ocado are Britain's fastest growing grocers, with increases of 13.6% and 10.8% respectively, whilst Tesco is the market leader ahead of Sainsbury's and Asda. Morrisons now lags behind Aldi.
I can't help wondering how far prices are going to rise. It doesn't feel sustainable. The Food and Drink Federation blames the increases on the "financial burden of government policies", such as increases to employer national insurance contributions and a new packaging tax. Climate change is another big factor, especially when it comes to the price of cocoa, coffee and olive oil, and the effects of extreme weather on crop yields. It feels a bit like we're in a vicious circle, and it's difficult to know how budgets are going to stretch.
Compared to January 2021, overall UK food prices are 38 per cent higher. Beef is up 25% year on year, whilst butter has soared by 19% and chocolate is up 16%.The famous chocolate bar example cited over the years is the price of a Freddo, with Tesco currently listing a single bar at 35p, three and a half times more than its traditional 10p pricepoint.
At home, Mrs C and I have started to cook more from scratch, and drastically reduced the amount of times we dine out, as unfortunately it has to be seen as a luxury these days if you're on an average salary. I do reserve some cash to pop into the local pub from time to time, as it's highly alarming that 378 pubs are likely to call last orders this year in England, Scotland and Wales, according to analysis from the British Beer and Pub Association. Pubs are the lifeline of local communities, and it's a sad sight to see them boarded up. I also do my bit to keep the cinema industry alive, and shop local where I can for fruit & veg etc.. But it's all a worry, isn't it? Farmers are being squeezed too, through the family farm tax and price pressure from supermarkets.
I don't have the answers, and I certainly wouldn't want to be Rachel Reeves. It's like trying to ballroom dance in a straitjacket, as she has set herself so many fiscal rules, she is left with very few levers to pull without breaking key commitments. I instinctively feel the top few per cent of earners should be paying a greater share towards the tax bill. I didn't receive any furlough or help during the pandemic, and just kept working, and whilst I feel lucky to do a job I love, I do feel as though those of us 'in the middle' are taken for granted. The benefits system is an unwieldy mess, and sadly used as a political football, forgetting that it's real folks' lives that are being discussed (much like the row over migration).
As the budget approaches, beware of populist snake oil salemen who promise the earth, but excel in obfuscation when asked how they would pay for it all. If it sounds too good to be true, it probably is. Good public services require us all to contribute our share, but there has to be a better way of doing all this stuff. Perhaps one day, someone will find it. In the meantime, I'm off to buy some posh instant coffee and grumble to myself about the price.
Alex Cann's weekly blog - 9th January
