Tea and meat prices push UK food inflation to 17-month high

Rising prices for tea and meat have pushed food inflation in the UK to the highest level in 17 months. About writes Bloomberg.

In July, food prices rose by 4% year-on-year, the fastest increase since February 2024. This contributed to an overall increase in store prices of 0.7%, the most in more than a year.

The British Retail Consortium (BRC) attributes the price increase to the increase in the minimum wage and tax increases. In addition, global supply disruptions have particularly affected the cost of tea and meat.

"Retailers are doing everything they can to protect their customers from the worst of inflationary pressures, but last year's £7 billion ($9.4 billion) retailer costs have forced most retailers to raise prices," said BRC chairman Helen Dickinson.

Economists warn that new tax hikes are likely in the fall, as the British Treasury under the leadership of Rachel Reeves may face a budget deficit of up to 30 billion pounds.

Rising food prices have a particular impact on households' inflation expectations and may trigger a new wave of demands for higher wages.

At the same time, according to Rightmove, rental price growth in the UK has slowed slightly. Rents outside London rose by 3.9% to £1,365 per month in the second quarter (the lowest annual growth since 2020).

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