Milk and cheese drive food price inflation to 45-year high

Food prices are rising astatine their fastest complaint for 45 years, with the outgo of basics specified arsenic milk, food and eggs each surging, latest figures show

Food terms ostentation deed 16.2% successful the twelvemonth to October, up from 14.5% successful September.

Energy and substance costs besides rose, helping propulsion the wide UK ostentation complaint to a 41-year high.

High prices are hitting poorer radical hardest, arsenic they walk much of their income connected nutrient and energy.

The latest wide ostentation figure, which is 11.1%, is the highest since October 1981 and comes up of Thursday's Autumn Statement, which is expected to spot Chancellor Jeremy Hunt denote nationalist spending cuts and taxation rises.

Mr Hunt said his plans volition purpose to bring spiralling terms rises nether control, adding that helium would instrumentality "tough but indispensable decisions" to get the system backmost connected track.

Inflation is simply a measurement of the outgo of surviving and to cipher it, the Office for National Statistics (ONS) keeps way of the prices of hundreds of mundane items, known arsenic a "basket of goods".

Items specified arsenic milk, pasta, margarine, eggs and cereals were among the nutrient items that saw the sharpest terms rises successful October, it said.

Grant Fitzner, main economist astatine the ONS, said that implicit the past twelvemonth "gas prices person climbed astir 130%, portion energy has risen by astir 66%".

Higher costs impact businesses arsenic good arsenic households, and rising vigor bills person forced immoderate firms to enactment up their prices.

This has led to households cutting backmost their spending, which is dragging connected the system and causing it to shrink. It means the UK is apt to participate into an economical recession astatine the extremity of the year.

Latest figures showed the system contracted by 0.2% betwixt July and September and the Bank of England has warned the UK is facing a pugnacious two-year downturn.

A recession is defined arsenic erstwhile an system shrinks for 2 three-month periods successful a row. It's a motion an system is performing badly, with companies often making little wealth and unemployment rising.

October was ever going to beryllium a precise pugnacious period for inflation. Despite the Energy Price Guarantee, which constricted the emergence of emblematic bills to £2,500 a year, ostentation is astatine a 41-year precocious of 11.1%. Without the enactment strategy it could person been much similar 13%.

But consumers don't request to beryllium told however wide-ranging this is, with nutrient terms ostentation up again to the highest complaint successful 45 years, driven by beverage and food prices.

Things volition stay pugnacious successful the coming months, with the afloat societal effect of these vigor bills not yet seen due to the fact that of a truthful acold mild winter.

And yet successful planetary markets determination are the smallest signs that the archetypal impetus for the spike successful ostentation a twelvemonth ago, the post-pandemic proviso concatenation problems, are starting to turn. China's flimsy easing of its zero Covid lockdowns besides suggests immoderate airy astatine the extremity of the tunnel.

This ostentation fig should beryllium the peak, but we person been astatine this constituent before.

Energy prices stay harsh, but overmuch volition beryllium connected tomorrow's announcements from the chancellor. So ostentation volition enactment precise precocious for a fewer months astatine least, arsenic it takes immoderate clip for these planetary factors to provender into mundane prices.

To stem the velocity of rising prices, the Bank of England has accrued involvement rates to 3%, which makes borrowing wealth much expensive.

Some economists person suggested October's 11.1% ostentation complaint could beryllium the peak, with Paul Dales, main UK economist astatine Capital Economics, saying prices could began to dilatory down "if the authorities continues to frost [energy] prices successful immoderate way".

"There is increasing grounds that the upward unit connected halfway ostentation from planetary factors is present fading," helium said.

"The caller falls successful planetary cultivation commodity prices suggest to america that nutrient ostentation volition soon commencement to ease."