Yahoo Movies Cost Of Living: Why Are UK Food Prices Rising?
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People are facing an “apocalyptic” increase in food prices, the governor of the Bank of England warned on Monday.
Food inflation accelerated to 3.5% in April, up from 3.3% in March - the highest inflation rate since March 2013.
Archie Norman, the chairman of Marks & Spencer, has warned food prices could even soar by as much as 10% this year.
But why is this happening?
One key reason is of supply chain problems and surging energy costs caused by the war.
“What’s happening is global prices are rising, it’s not to do with UK food so much as the effect of freight costs, wheat prices, oil and energy prices knocking onto almost everything,” Norman explained.
“As a consequence, all food retailers in the UK are – because we operate on very thin margins – going to have to reluctantly allow some food price inflation to run through the system.”
Global energy prices have soared, in part as a result of Russia’s invasion of Ukraine, because supply is disrupted.
This means not only does it cost more for food manufacturers, such as farmers, to make products, but more expensive petrol means literally transporting the food to shops costs more.
Ukraine and Russia also supply a lot of important basic food materials.
Russia and Ukraine are both key suppliers of wheat, with around 30% of the world’s supply coming from those two countries.
To make matters worse, India, the world’s second largest supplier of wheat, has also banned exports after a heatwave damaged production and sent domestic prices rocketing.
Similarly, Ukraine is the world’s main supplier of sunflower oil, and Russia is the second-largest supplier. The majority of the UK’s sunflower oil comes from Ukraine.
The price of oils and fats for food increased by 7.2% in March alone, adding to a more than 18% rise in the last year.
The cost of nitrogen fertiliser, used to grow food in the UK, has also more than tripled. Russia is a key supplier of fertiliser.
This all comes as workers have seen their pay fall further behind rocketing inflation.
Figures from the Office for National Statistics (ONS) revealed that regular pay excluding bonuses dropped by 2.9% in March - the biggest fall since November 2011.
But data from the ONS are expected to show that inflation hit 9.1% in the year to April.
This article originally appeared on HuffPost UK and has been updated.
