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Britain’s cost of living squeeze deepened last month as 96 per cent of households reported that the price of their food shop has increased.
It was the highest figure in two years, according to data from the Office for National Statistics, as food prices push wider inflation to an 18-month high.
The rise has been partly blamed on Labour’s employer National Insurance hike, which firms are passing on to customers.
High energy and ingredient costs and a packaging tax have also driven food and drink inflation, manufacturers say. Yesterday’s figures showed 55 per cent of households reported increases in gas or electricity bills in the past month, too – the lowest since September last year.
However, a rise is coming next month when the energy price cap, set by the regulator, goes up due to the rising cost of paying wind farms to switch off when they are producing too much energy to be transmitted.
Overall consumer price index inflation was 3.8 per cent in July, according to latest figures, the highest in the G7 group of advanced economies. The Bank of England expects it to hit 4 per cent this year.
Last week, Governor Andrew Bailey said there was now ‘considerably more doubt’ about when further interest rate cuts would be made amid rising inflation pressures.
HSBC experts now predict there will be no further rate cuts until next April.
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