Families skipping meals as food prices rise by 14 percent

The rise hammered household budgets already struggling with soaring energy bills and mortgage costs.

It helped drive headline CPI inflation back to 10.1 per cent which it touched in July, a rate previously unseen since 1982.

The rate was more than five times the two per cent rate of inflation which is the government’s current target.

The blow came as consumer magazine Which? revealed millions of households are skipping meals or finding it hard to put healthy food on the table due to the cost-of-living crisis.

It was also bad news for High Street firms now facing a £2.7billion tax surge next year as the business rates they pay are linked to the rate of inflation.

The rise in grocery prices has been accelerated by the war in Ukraine which pushed up the cost of fertiliser and animal feed.

Global meat prices have jumped as a result, while the knock-on effect to oil production in the regions has also hit the price of sunflower oil.

Food and drink prices have also been affected by the recent weakness in the pound, which has caused more expensive imported products and ingredients.

Karen Betts, chief executive of the Food and Drink Federation, said: “Food and drink manufacturers continue to do everything they can to keep product prices down, but huge rises in ingredient, raw material, energy and other costs mean they have no choice but to pass some price rises on.”

Dairy led a basket of everyday grocery price rises with low fat milk the fastest rising item costing an extra 42.1 per cent in September compared to 12 months ago.

Butter was up 28 per cent, eggs 22.3 percent and vegetables and meat were also up with potatoes rising 19.9 per cent, poultry up 17.2 percent meat up 15.3 per cent, bread 14.6 percent pizza and quiche 9.7 percent and fresh fruit 8.8 percent.

The consumer magazine Which revealed that 9 percent of households were finding it “very difficult” to get by as the price of food rose.

Of those, 50 percent said their household was skipping meals, as did 26 percent of those who are finding the current situation “quite difficult”.

Almost half of all consumers (46%) said they were finding it harder to eat healthily compared to before the crisis, rising to 78 percent of those finding it very difficult financially.

Which? called on supermarkets to help their customers with clearer pricing, promotions targeted at supporting shoppers on low incomes and by ensuring budget lines are widely available, particularly in locations where people need them most.

The consumer group’s survey found that 85 per cent of people in the UK are making an adjustment to save money on food as a result of the cost-of-living crisis, most commonly by looking out for food items on promotion.

Half (50%) of respondents said they were trading down to cheaper products than they were buying previously.

Even among those who reported living comfortably, 47 percent said they were taking measures to save money on food.

The poll found 42 per cent of households are buying expensive or treat foods less often and 36% are shopping around in supermarkets, other stores or online.

Almost one in five said they had bought more frozen food to cut costs (18%), around one in 10 (12%) said they had resorted to skipping meals and 5 percent said that they were buying more ready meals or microwave meals.

Sue Davies, Which? head of food policy, said: “The devastating impact of the cost-of-living crisis is, worryingly, leading to millions of people skipping meals or struggling to put healthy meals on the table.

“Supermarkets have a crucial role to play in supporting their customers through this very difficult time.”

“By making sure that everyone has easy access to budget food ranges that are also healthy, can easily compare the price of products to get the best value and that promotions are targeted at supporting people most in need, supermarkets can help their customers to navigate the tough months ahead.”

Office for National Statistics director Darren Morgan said: “The rise in headline inflation was driven by further increases across food, which saw its largest annual rise in over 40 years, while hotel prices also increased after falling this time last year.”

“These rises were partially offset by continuing falls in the costs of petrol, with airline prices falling by more than usual for this time of year and second-hand car prices also rising less steeply than the large increases seen last year.”

“While still at a historically high rate, the costs facing businesses are beginning to rise more slowly, with crude oil prices actually falling in September.”

Economists at the ONS said rising transport prices slowed significantly last month on the back of cheaper fuel costs.

Martin Beck, chief economic adviser to the EY Item Club, said he now “expects the CPI measure to peak at around 11 percent in October, followed by a more gradual decline than previously anticipated, caused by the recent fall in sterling”.

He added: “However, the outlook for inflation beyond the next few months has become more uncertain following the recent fiscal U-turns made by the new Chancellor.”

The inflation rate will also be used to decide the increase in business rates: the property tax facing high street firms.

The high inflation rate signals that the overall business rates bill for firms across England will rise by £2.72 billion from April without Government intervention, according to experts at Altus Group.

The British Retail Consortium (BRC) said retailers alone are set for an £800 million tax hit next year as a result.

The news also comes as current business rates relief for many hospitality, retail and leisure firms is expected to end next year.

The end of the relief, which provides a 50% rates reduction for hospitality, retail and leisure firms to a cap of £110,000 per business, is expected to add another £2.67 billion to the national business rates bill in April.

Kate Nicholls, chief executive of industry group UKHospitality, said the potential rates hike “could prove fatal” for many companies.

She said: “With the September inflation figures traditionally being used to set tax changes and rates for the following year, there is a real risk that hospitality businesses will face an enormous cliff edge in April if these numbers are used to hike the business rates tax level.

“Such an increase at the same time as the risk of business rates reliefs ending could prove fatal for many.

“With hospitality inflation contributing heavily to the overall inflation rate, we now risk an inflationary spiral where our higher costs lead to higher taxes which lead to even higher prices.”