UK supermarkets have claimed that food prices have peaked and inflation will start falling significantly this year.
In a video call held by The Treasury and governor of the Bank of England, Andrew Bailey, leading supermarkets agreed that food price inflation are “past the peak” and that prices would soon start to drop, easing the financial pressures consumers are facing.
However, the Bank of England raised interest rates from 4.25% to 4.5% yesterday – meaning prices could still be higher for longer.
Although the government does not accept that supermarkets have been profiteering, it is urging them to help their customers more.
Food and drink price inflation increased by 19.1% year-on-year in March, up from the 18.2% increase in February.
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Furthermore, the price of a pint of milk has increased by 40% to 70p and the price of a 250g pack of butter by 29% to £2.36, according to figures published by the Office for National Statistics (ONS).
“Supermarkets in Britain are highly competitive but the wholesale price of goods has increased significantly due to energy and labour costs,” a government source said during the call.
Andrew Bailey said the runaway cost of food was a “big issue” that was driven by a complex set of factors. Last year he warned that the shortage of vital grains produced in Ukraine could have an “apocalyptic” impact on global inflation, as the UK is still feeling the financial impact.
Additionally, supermarkets asked ministers for help during the call in lowering food prices by reducing the cost burden of packaging and environmental regulations.
The government will host a meeting for food producers and supermarkets next week to question the prime minister.
