Food inflation is predicted to nearly double to 20 per cent early next year, households are being warned.
Families are already reeling from a sharp rise in the cost of many groceries, adding to the wider cost of living crisis.
The impact of higher commodity costs, energy and the price of imported goods has already seen food inflation reach more than 10%.
But global bank Citigroup, in a joint report with the Institute for Fiscal Studies, says this could jump to 17% in the first three months of next year, and peak at around 20%.
Sterling’s weakness against the dollar risks adding to the hike because the UK imported about £50billion worth of food from abroad last year.
“Food is now an increasingly pressing concern,” said Benjamin Nabarro, chief UK economist at Citigroup.
Research firm Kantar will today (Tues) publish figures for grocery price inflation.
Previous data from the firm found that the average household was spending £571 more on groceries than a year ago.
Citigroup’s analysis out today predicts the overall rate of UK inflation will peak at just under 12% later this year.
It also believes the Bank of England will eventually hike interest rates to 4.5% - up from 2.25% now, but lower than the 6% financial markets had been predicting at one stage recently,
Citi warned: “Households will be hit by rising mortgage costs as increasing numbers roll off their fixed rate deals.
“Rising interest rates will also make it more expensive for households to borrow their way through the storm.”
