10 September 1997
Food prices push inflation down to 2.8%

Lower prices for tomatoes and lettuces helped foods costs fall by 0.4% in the UK last year, the Office for National Statistics (ONS) said.

They were a vital ingredient behind last months fall in the underlying rate of inflation from 3% to 2.8%.

Seasonal food prices rose by just 0.6% between July and August, the lowest monthly increase since October 1994. The figure was 5.3% during the same period last year. Non-seasonal food also helped keep the rate of inflation down.

Ciaran Barr, UK economist, at Deutsche Morgan Grenfell, said the rise in food inflation in June and July was attributable to adverse crops.

But the ONS warned fresh fruit prices could be higher when the price indices for September were released because bad weather had damaged crops in the Mediterranean. Potato prices could also climb higher because of blight and hot weather.

  • Financial Times 10/09/97 page 6
  • The Daily Telegraph 10/09/97 page 23, page 25 (City Comment)