UK inflation rose to a 40-year high at 11.1% last month as food prices continue to soar amid the cost-of-living crisis.
According to the latest figures from the Office for National Statistics, this is up from 10.1% in September with one of the largest contributors to the rise being food and non-alcoholic beverages, which saw price rises of 16.4% in the 12 months to October 2022.
“The largest upward effect came from milk, cheese, and eggs, where prices for shop-bought milk and cheddar cheese rose between September and October 2022 but by more than between the same two months in 2021,” the Office for National Statistics said.
Speaking of the rise in inflation rates, McKinsey partner, Kevin Bright said: “With millions of UK households anticipating a higher tax burden in the upcoming Autumn statement, the rising prices will be felt even more heavily in the near term.
“Food continues to be a large driver of inflation, meaning consumers are feeling the pinch in their weekly grocery shop. As a result, consumers are switching brands and retailers, as they look for cheaper options.”
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Bright said that McKinsey’s latest consumer sentiment research shows that 57% of consumers “have tried a new private label brand when shopping for groceries and other essentials in the last three months.”
Brand switching to private-label/ entry-level priced brands was found to be most common across frozen food for 50%, as well as snacks and confectionary for 44%, while bread and bakery switches were taking place among 42% of consumers.
“We can see the tangible impact that rising prices are having on large segments of the population. 55% of Millennials and 61% of Gen X have had to scale back their lifestyles due to an increase in prices compared to 36% of baby boomers,” he added.
Considering additional price rises in the run up to Christmas, British Retail Consortium chief executive, Helen Dickinson said that “many customers are keenly anticipating Black Friday deals and other promotions.”
“Tomorrow, the Chancellor will unveil the autumn budget, where he has the opportunity to provide support for struggling households and relieve some of the costs on retailers and their suppliers, which in turn put pressure on prices.
“Retailers face an £80m per year hike in business rates from April 2023, so urgent Government action is needed to mitigate this and prevent even higher inflation in the new year.”
