Food inflation rates have reached the highest in three decades, with food prices rising to 5.4%, the Office for National Statistics (ONS) revealed.
According to the ONS, food and non-alcoholic beverages have made the largest contribution to the change in the CIPH annual inflation rate between November and December.
“Within our trolleys there were some eye-watering rises, including margarine up 27.3% in a year, oils and fats 13.1%, sauces 11.6%, lamb 8.5%, low fat milk 8.2% and crisps 9%,” Hargreaves Lansdown senior personal finance analyst Sarah Coles said.
“When these essentials rise in price, it makes it far more difficult for us to cut costs.”
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The news comes as pandemic-related shifts in demand and supply and post-Brexit supply chain issues have affected the pricing of commodities and goods.
As a result, the Bank of England expects the consumer prices index (CPI) to rise to 6% in April, while other forecast analysts said it could reach 7% unless the government intervenes in the energy sector.
Furthermore, pay rises have not kept up with the rates of inflation with pay for workers in Britain falling in real terms for the first time in more than a year.
Pay packets rose by 4.3% in November but fell behind the rising cost of living by 0.9%.
In December, Tesco workers were set to strike as their 4% pay rise was 2% below the inflation rate and was a “real terms pay cut”.
Industrial action warnings over inadequate pay rises were also voiced by Morrisons, Sainsbury’s and Asda workers last November.
This comes as the Trades Union Congress (TUC) warned that real wages were “barely” set to grow in the next five years and that “Britain needs a pay rise in 2022”.
The chancellor Rishi Sunak said he was aware of the cost-of-living pressures “and we will continue to listen to people’s concerns as we have down throughout the pandemic.”
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