What is happening to food prices?
For the past several months, the UK has been plagued by the cost-of-living crisis. Amidst hesitance to turn the heating on and postponing purchases, it is getting increasingly difficult to keep food on the table. According to the BBC inflation rates only fell from 10.7% to 10.5% between December and January, a large contributor of which is the near 17% increase in food prices. Essentials such as milk, cheese and eggs witnessed the largest soar in prices.
The war on Ukraine continues to push up costs associated with animal feed, fertilisers, and energy. This results in the increased cost of factors of production for food producers, who in turn raise prices in order to maintain their profit margins.
A survey by the ONS revealed that in response to the soaring prices, 45% of Britons were forced to cut back on food shopping and essentials. The rise in prices of essentials such as bread and eggs disproportionately affects lower-income households, who spend a larger portion of their income on food and energy than wealthier households. Furthermore, a report by Resolution Foundation found that people with disabilities, who account for one-third of the poorest households in Britain, were significantly impacted by the cost-of-living crisis. 31% of people with a disability had to reduce their spending on food this winter, compared with 18% of the non-disabled population.
The future looks gloomy as many Economists forecasts a difficult year for consumers and businesses as inflation shows no immediate signs of waning.