West News Wire: In a normal British grocery store, not a single item’s price is decreasing. The price of a weekly food shop is increasing at the quickest yearly rate since 1977, including the cost of basic necessities like bread, milk, and cheese as well as sugar and tea.
The cost of living crisis in Britain is worsening horrifyingly more than a year into the worst stretch for living standards in recorded history. Then came the skyrocketing cost of energy. Our gas and electricity costs are now being passed off to the grocery checkout receipt.
The announcement last week that food and nonalcoholic beverage inflation has reached 19.1% should be alarming the whole administration.
The effects are even severe for lower income households who spend a bigger percentage of their income on food and other necessities. 4.7 million individuals experienced food insecurity prior to the onset of the cost of living crisis, making Britain a nation of rising in-work poverty and families compelled to use food banks, including 800,000 children.
However, despite Rishi Sunak’s pledge to reduce inflation by half this year as one of his top five priorities before the next election, there are little indications that his administration is doing much to address the food crisis gripping Britain. The prime minister is focused with the remuneration of junior doctors and nurses rather than the rising prices in supermarkets.
Last week’s inflation figures for March show a worrying new phase of the cost of living crisis is taking root.
The energy price surge triggered by Russia’s invasion of Ukraine is beginning to fall out of the annual inflation estimate. Prices might remain at sky-high levels but are at least not getting worse. In the clearest example in the March data, petrol and diesel prices were in sharp reverse, helping the annual inflation rate cool to 10.1%.
As the anniversary of the staggering 54% spike in the Ofgem price cap in the same month a year ago becomes the new baseline for energy prices instead of earlier, lower levels, economists anticipate that inflation has slowed even further in April.
Food costs, on the other hand, are solidly moving in the opposite direction, limiting the decline in headline inflation. Ministers should be scurrying to find answers in order to support households and strengthen Britain’s much undervalued food supply chain in light of this development.
With a delayed effect, Vladimir Putin’s battle on energy markets and essential commodities like fertiliser, wheat, and vegetable oils has caused the majority of the food shock. Wholesale food commodity prices have fallen sharply in recent months but farmers and food manufacturers buy and sell using long-term fixed contracts making food a tough industry to knock inflation out of the system.
Economists predict that inflation has slowed even further in April as the anniversary of the startling 54% increase in the Ofgem price cap in the same month a year ago becomes the new benchmark for energy prices instead of previous, lower levels.
Contrarily, food prices are firmly going in the opposite direction, which is preventing a further drop in headline inflation. In light of this scenario, ministers should be scrambling to find solutions in order to assist homes and reinforce Britain’s significantly undervalued food supply chain.
With a delayed effect, Vladimir Putin’s battle on energy markets and essential commodities like fertiliser, wheat, and vegetable oils has caused the majority of the food shock. Wholesale food commodity prices have fallen sharply in recent months but farmers and food manufacturers buy and sell using long-term fixed contracts making food a tough industry to knock inflation out of the system.
The impact of extreme weather on crops, the worst avian flu outbreak in British history, potential profiteering by food manufacturers, and price gouging by shops have all contributed to the price increase.
However, the government can influence some elements.
There is a tendency to attack the Bank of England for failing to keep inflation under control and making all of its forecasts incorrect on the right of politics, which supports Brexit. Jacob Rees-Mogg projected that leaving the EU would result in a 20% decrease in food prices, yet the exact opposite has occurred.
For a variety of valid reasons, no massive influx of inexpensive produce from the rest of the world materialised. Due to their geographic proximity, high welfare and hygiene standards, and reliable supply chains for fast-moving, and often perishable, consumer goods.
However, not all of this relates to Brexit. Food prices are rising at a similar rate throughout the EU, with some countries, like Germany and Sweden, seeing more food price inflation than Britain.
Costs for imports have increased as a result of the pound’s decline since the Brexit vote in 2016 and its even poorer performance under Liz Truss’ catastrophic premiership. This had an effect, particularly throughout the last winter. But despite seasonal changes, over half of the food eaten in Britain is from within the country.
However, British farmers warn that the government is failing to take adequate steps to support domestic production. Brexit has compounded labour shortages including a lack of seasonal agricultural labour and skilled butchers, which farmers and food producers say the government could take more action to address.
Last summer, ministers came forward with a food strategy in an attempt to raise domestic food security, which was later condemned by the government’s own lead adviser on the issue. Minette Batters, the president of the National Farmers’ Union, says more could be done, as a lack of support forces many farmers to go out of business or mothball production in the face of rising costs.
The government has many options, but it rarely makes use of them. If we don’t start to have a policy that delivers on domestic supply, we’ll keep bouncing from crisis to crisis.
Because of retail rivalry, global supply networks, and industrialised food processing, some opponents claim that food prices have plummeted to unacceptably low levels in recent years. However, this shows yet again how critical it is for the government to seize control. Is letting the market fail the wisest course of action if it enters the present crisis in a precarious position?
The risks of exposing households to the full force of maladaptive market dynamics are obvious.
About half of adults are worried about food costs, official estimates show, with higher rates in deprived areas. Soaring prices for nutritious, healthy food will have the biggest impact on poorer families, at a time when long-term ill health is at record levels among working-age adults.
With the cost of living crisis entering a new phase, action is required to prevent soaring food costs from stoking already worrying health inequalities. Failure would risk perpetuating the crisis long into the future.
