Meat prices drive inflation

Increasing farmgate meat prices drove food inflation to its highest rate since September 2008, British Retail Consortium figures revealed.

In February the BRC Nielsen Shop Price Index reported annual inflation rising to 1.9% from 1.1% in January. The increase was the second in as many months and marked a reversal of the period of falling inflation seen since last summer.

Annual inflation in the fresh food category increased to 10.2% in February, from 8.4% in January. In the past year the BRC said prices of cattle, sheep and pigs had increased by 19%, 38% and 75%, respectively.

“The weak pound has made UK produce more attractive for overseas buyers, restricting supplies at home and pushing prices up,” Stephen Robertson, BRC director general commented. “Non-food goods, especially electricals, continued to be cheaper than a year ago but prices fell more slowly as exchange rates increased the cost of imports and some discounts ended. But, overall, shop price inflation is still half its peak of last year.”

The BRC acknowledged that a fall in the value of the pound had helped the competitiveness of the UK farming industry, but said that as demand for exports had risen, domestic supply had tightened, causing the price of fresh meat to rise for many retailers who source their products from the UK.