The UK Consumer Prices Index (CPI) annual rate rose to its highest-level since 1982, as the cost-of-living crisis shows no signs of slowing down, according to new figures from the Office of National Statistics (ONS).
For the month, CPI (which does not include owner occupier’s housing costs and council tax) rose to 9.4% for the 12 months to June 2022, up from 9.1% in May 2022. On a monthly basis, CPI was up 0.8%, compared with a rise of 0.5% in June 2021. The index was hurt mainly by the rising prices of motor fuels and food.
The ONS report said that food and non-alcoholic beverage prices rose by 9.8% for the period, up sharply from 8.7% in May, marking the highest rate since March 2009. This monthly rise was the largest between May and June since 2008, and it follows similar monthly rises into April and May 2022.
The report said the hike was driven by price movements across many sectors, with the largest impact coming from prices of milk, cheese, and eggs. It was also impacted by the rising price of vegetables, meat, and other food products (such as ready meals).
However, the annual rate for clothing and footwear was 6.1%, down from 6.9% in May. Prices were little changed on the month but rose by 0.8% between May and June 2021. Prices normally fall at this time of year as the summer sales season begins, but there was little movement in 2022.
Karen Betts, the Chief Executive of the Food and Drink Federation, said: “It’s very concerning to see food price inflation hit 9.8% in today’s ONS figures. Food and drink companies are doing everything they can to contain inflation and to limit price rises for hard-pressed households, but the situation is undoubtedly very challenging, with the cost of ingredients and energy still rising and labour shortages biting.”
She added: “While the inflation the UK is experiencing is being driven by disruption in the global economy, there are things our government can do to help ease the cost of living crisis for households and to help food and drink businesses thrive through a difficult period. Our industry wants to see bold new policies from a new Prime Minister that create the conditions for investment to boost productivity and competitiveness. These include incentivising business investment through rapid reforms to capital allowances, incentivising skills training, reforming burdensome regulation and red tape, and promoting growth in new markets through exports.”
NAM Implications:
- Inflation impact is all about consumer perception.
- i.e. 9.4% for the 12 months to June 2022 is vaguely interesting from a consumer-voter POV.
- In other words, it is the 12%, 15%, and 20+% on what are regarded as essentials…
- …that affects the consumer’s willingness/ability to spend that really matters.
- Suppliers and retailers need to factor these perceived ‘realities’ into forecasting.
- In order to anticipate aisle behaviour…
