A finance expert has warned that supermarket prices are set to rise, even after inflation remained unchanged in recent months. The Bank of England's latest inflation update shows the rate holding steady, but this does not mean that supermarket prices are safe from increases. Global events are expected to have a delayed effect on prices in the coming months.
Inflation Holds Steady
The Office for National Statistics (ONS), which publishes inflation figures, reported that food inflation is slow compared to other areas of consumer spending. Economists had predicted the rate would rise to 3% in May, so the steady figure is a welcome relief for many households.
Chancellor Rachel Reeves commented after the figures were released: "While the war in the Middle East pushes prices up globally, we have got the right economic plan and inflation has held steady."
Warning on Supermarket Prices
However, one expert has warned that supermarket prices may not be in the clear when it comes to the effects of the Middle East conflict. Industry insiders and analysts have previously warned of more expensive groceries as a result of the war, but that impact has not yet been fully felt by UK households.
Karen Betts, chief executive of the Food and Drink Federation (FDF), told The Sun: "It's good to see an easing of food inflation in May, but consumer prices still don't reflect the inflation caused by the closure of the Strait of Hormuz. It generally takes several months for the increased costs paid by farmers, processors and manufacturers to filter into raised prices at the tills… and we expect food inflation to pick up this year and into next."
Items at Risk of Price Increases
Several experts previously told the Daily Express about the effects the war would have on supermarket prices. Jim Mellon, an investor and Chief Executive of Agronomics, said: "Global conflicts, along with climate change, are causing food shortages, supply chain issues and price spikes in the UK and beyond."
George Philips, commercial director of the UK's largest World Food distributor and wholesaler, Wains, listed several items at risk of increases:
- Bottled water
- Cooking oil
- Washing up liquid
- Tea
- Coffee
- Rice
- Sugar
- Meat
- Milk
- Bread
- Pasta
- Cereal
Retail analysts at Omnisend noted that oil and gas prices will make the transport of goods more expensive, which will eventually be reflected in the final price displayed in shops. Retail analyst Marty Bauer explained: "That extra cost rarely disappears, and most of Britain's biggest retailers will likely do anything to avoid it impacting their margins, so unfortunately, it tends to be passed down the chain, while making sure to avoid deterring consumers entirely."
