Food prices hit a 45-year high despite inflation easing in the UK, official figures show.
Consumer Price Inflation (CPI) fell slightly to 10.5% in December, down from 10.7%, the Office for National Statistics said, indicating the worst of the cost of living crisis may have passed. The drop was largely due to a fall in fuel costs, with petrol dropping by 8.3p per litre month on month in December.
But food and drink inflation soared again, to 16.8% in December, up from 16.4% in November. That is the highest level since September 1977.
Read more: Revolution Bars to close venues on Mondays and Tuesdays due to energy bills
Grant Fitzner, chief economist at the ONS, said: “Inflation eased slightly in December, although still at a very high level, with overall prices rising strongly during the last year as a whole. Prices at the pump fell notably in December, with the cost of clothing also dropping back slightly.”
“Food costs continue to spike, with prices also rising in shops, cafes and restaurants,” he added.
The ONS said clothing, footwear, recreation and culture prices also brought inflation down. Clothing and footwear prices rose by 6.5%, down from 7.5% in November.
Average petrol and diesel prices have dropped to their February 2022 levels.
CPI has eased since the eye-watering 41-year high of 11.1% seen in October last year, when soaring energy bills pushed up the cost of living. It is expected to fall throughout this year as the cost crisis takes its toll on the economy, with recession looming large.
The Government has also pledged to help halve inflation by the end of 2023.
Chancellor Jeremy Hunt said: “High inflation is a nightmare for family budgets, destroys business investment and leads to strike action, so however tough, we need to stick to our plan to bring it down. While any fall in inflation is welcome, we have a plan to go further and halve inflation this year, reduce debt and grow the economy – but it is vital that we take the difficult decisions needed and see the plan through.”
But Labour hit out at the Government’s economic policies and said inflation was still five times the two per cent target.
Energy costs are also set to surge once again in the spring, when the Government scales back its support package, capping gas and electricity bills at £3,000 a year, up from £2,500 currently.
Business groups also raised concerns over the impact of high inflation on firms across the UK, with consumer spending being reined in due to the cost crisis and Government support for companies also set to be trimmed considerably from April.
Read next:
- DWP issues urgent scam warning to anyone receiving £301 cost of living payments
- DWP major benefit payment changes in pipeline for millions of sick and disabled people
- Universal Credit and what 'light touch' category means for DWP benefit claimants
- 16 DWP and HMRC benefits that could give you extra money - check which ones you can claim
- New Universal Credit monthly payment rates from April 2023
