The prices of butter, sugar and milk have surged by 11.8 per cent, 12.2 per cent and 13.2 per cent respectively, new figures revealed today, as Premier Foods said it would be hiking the cost of Mr Kipling cakes in the face of surging inflation.
The Office for National Statistics (ONS) revealed that inflation hit 9 per cent in the year to April today, measured by the Consumer Prices Index (CPI). This is thought to be the highest figure for 40 years.
Most of the rise was due to the 54 per cent hike in the energy price cap, but prices on all but two of the more than 80 items that the ONS tracks have risen over the past year.
According to Retail Price Index figures – which are slightly different to the CPI – potatoes were one of the very few household grocery staples to drop in price over the year to April – down 1.2 per cent.
But overall food prices rose 6.8 per cent, with meats, oils and some animal products especially hit.
According to Retail Price Index figures – which are slightly different to the CPI – potatoes were one of the very few household grocery staples to drop in price over the year to April – down 1.2 per cent. But overall food prices rose 6.8 per cent, with meats, oils and some animal products especially hit
The rise across meat categories was clear: lamb was the worst hit, up 14.2 per cent, followed by poultry (10.4) and beef (9.8) while pork got off with a lighter 4.9 rise.
Butter prices rose 11.8 per cent and the price of oils and other fats soared 18.2 per cent over the last year after fears of a shortage sparked by the war in Ukraine – which is a major producer of sunflower oil.
Away from food, households were also hit by an 8.1 per cent extra price on their restaurant bills, while the price of takeaways and snacks rose 6.5 per cent.
Premier Foods – which also owns brands such as Oxo cubes, Sharwoods and Ambrosia – today said the Ukraine war was pushing up prices of many of its ingredients, including wheat and dairy, while fuel and energy costs are also rocketing.
Cost of grocery staples: Oil surges by 18% after Ukraine war with only potatoes now cheaper
Biscuits and cakes 11.0%
Other meat 7.1%
Oil and fats 18.2%
Fresh milk 13.2%
Soft drinks 6.5%
Sweets & chocolates 0.7%
Fresh vegetables 2.6%
Fresh fruit 4.7%
Other foods 8.1%
UK Retail Prices Index, as of April 2022, over past year
Its boss Alex Whitehouse said the group raised prices after seeing a ‘high single digits’ increase in costs in its year to April and is expecting to ramp them up again as it braces for a further ‘low double-digit’ rise in costs over the year ahead.
He said the rises would be spread across its brands, though it is also launching cost efficiency programmes to try and tackle surging inflation.
Mr Whitehouse said: ‘Food inflation is pretty significant and for some families that’s going to be really tough.’
He pledged the group would ‘work really hard to offset as much of the inflation pressures as we can and help people as best we can by trying to keep prices down’.
Details of the price hike plans follow results showing the group’s pre-tax profits jumped 16.4 per cent to a higher than expected £102.6 million in the year to April 2.
Premier Foods said its Mr Kipling cake brand enjoyed its best year ever in 2021, helping the overall sweet treats category enjoy a 7 per cent rise in revenues.
The firm announced a 20 per cent rise in its shareholder dividend payout on the back of the bumper results, helping shares rise 6 per cent in morning trading today.
Bank of England Governor Andrew Bailey warned earlier this week that ‘apocalyptic’ food prices could be disastrous for the world’s poor.
Energy prices are also feeding into the rising food costs – farmers and food factories need gas, petrol and electricity to run their businesses and have to pass these costs onto customers.
This is also the case for many other products.
Drinking at a pub got more expensive too, with the cost of beer up 4.9 per cent and wine rising 6.2 per cent. Alcohol prices increased less rapidly in off licences and supermarkets.
Food and Drink Federation chief executive Karen Betts said that the figures are slightly worse than food manufacturers had feared.
‘This is a very worrying time for many households, and food and drink businesses are continuing to do everything they can to contain food-price inflation,’ she said.
‘Ingredient price rises have been relentless for more than a year now, as a result of pressures in the global supply chain caused by the Covid-19 pandemic.
‘The war in Ukraine, with both Ukraine and Russia important suppliers of commodities like wheat and food oils, as well as energy and fertiliser, has made the situation worse.’
Newly-modelled figures from the ONS show that CPI would have last been above the April 2022 level of 9 per cent in March 1982 – when it was 9.1 per cent
Boris Johnson was flanked by Rishi Sunak at PMQs today as he clashed with political opponents over the cost-of-living crisis
Sharp increases in snergy and other household bills have been driving the recent spike in inflation
How inflation threatens families and the public finances
Inflation has long been seen as one of the biggest threats to economies.
In extreme examples, it has spiralled out of control and sparked panic.
The German Weimar Republic effectively collapsed after the value of the mark went from around 90 marks to the US dollar in 1921 to 7,400 marks to the dollar in 1921.
In Zimbabwe between 2008 and 2009 the monthly inflation rate was estimated to have reached a mind-boggling 79.6billion per cent.
Although inflation has faded in the minds of Britons who have become used to ultra-low interest rates and stable prices, it caused chaos here in the 1970s.
Deregulation of the mortgage market, the emergence of credit cards and an overheating economy drove the rate to an eye-watering 25 per cent in 1975.
People would rush to buy goods with their wages after pay-day, as the costs were rising so quickly.
Strikes erupted as there was pressure for pay packets to keep pace with prices.
Unemployment rose as the economy tipped into recession, and the government had to pump up interest rates in a bid to bolster the pound and control the surge.
That meant mortgage interest payments spiked into double digits.
And as a result servicing the national debt became a serious problem.
At Prime Minister’s Questions this afternoon, Boris Johnson blustered as he was grilled by Keir Starmer over whether he will bring in a levy on profits of oil and gas firms – amid signs of splits in the Cabinet on the idea.
Instead he blustered that ‘this Government is not in principle in favour of higher taxation’ and said the government would ‘look at all the measures that we need to take to get people through to the other side’.
Mr Johnson highlighted the huge UK investments being made by such companies, and argued they were already highly taxed. But No10 effectively issued a threat by saying the government wanted them to pump more money into infrastructure.
Earlier, Chancellor Rishi Sunak insisted that ‘countries around the world are dealing with rising inflation’, and he ‘stands ready’ to offer further support to Britons – while stressing that he cannot ‘protect people completely’ from pain.
Opposition parties are urging an emergency Budget to slash VAT and help struggling Britons who are ‘on the brink’.
But there are mounting signs of splits in Cabinet over how to respond, with Foreign Secretary Liz Truss suggesting more tax cuts are needed and slating the idea of a windfall tax on energy firms – something Mr Sunak has said he is seriously considering.
Experts warned that ‘this is what Stagflation looks like’, as the UK economy stalls and teeters towards recession after the pandemic and Ukraine war caused chaos.
Analysts said another interest rate hike next month is now ‘inevitable’, potentially to 1.25 per cent, as the Bank of England scrambles to stop prices spiralling out of control. But the Pound still dipped further against the US dollar as investors priced in the increasingly grim situation.
BoE governor Andrew Bailey infuriated ministers earlier this week when he delivered an extraordinary warning that ‘apocalyptic’ food price rises are in the pipeline.
He admitted that the Bank is largely ‘helpless’ to prevent the ‘very real income shock’ and unemployment will rise.
The unrelentingly miserable news continued with pump prices reaching new records, of 167.64p for petrol and 180.88p for diesel.
In a further headache for ministers, the RPI measure of inflation has rocketed even higher to 11.1 per cent in April – with unions threatening strikes unless that is used as the basis for pay rises in the public sector.
The Bank of England has predicted that inflation will keep rising and hit 10.25 per cent by the end of the year – before falling back again
The Bank of England’s latest projections for GDP and inflation made miserable reading
Rishi Sunak ‘mulls bring 1p income tax cut forward to THIS this year’ amid cost-of-living crisis
Rishi Sunak is considering bringing forward a 1p income tax cut and increasing the warm home discount by hundreds of pounds amid urgent calls for the Government to tackle the cost of living crisis.
Conservative MPs are urging the Chancellor to take action as quickly as possible to help households struggling with rising prices.
The Office for National statistics recorded inflation at 7% in March and on Wednesday it is expected to unveil a figure of 8% for April, while the Bank of England has said inflation is likely to peak at 10.25% during the final quarter of 2022.
Rishi Sunak and his Treasury ministers have suggested new measures to help ease cost-of-living pressures are being developed but will not be introduced imminently, i news reports.
The warm home discount will give three million of England and Wales’ poorest homes £150 off their bills from October, but Treasury officials have also drawn up plans for a one-off increase of £300, £500 or possibly £600 to battle rising energy prices, The Times reports.
The extra measures could cost more than £1 billion and would be directly funded by the government, instead of being levied on energy bills as under the current system.
Sunak is reportedly drawn to this approach partly because there is a lower risk of it becoming permanent.
Also, the basic rate of income tax cut from 20p to 19p is set to take effect in April 2024, but Treasury sources said Mr Sunak is thinking about bringing it forward by one year, announcing it at the Budget in the autumn.
Officials are now said to be looking into deficit projections from the Office for Budget Responsibility to figure out if the change would be affordable.
Ministers face demands for 11 PER CENT public sector pay rises as unions dismiss calls for restraint and threaten strike action in ‘summer of discontent’
Trade unions today ramped up warnings of widespread strike action if workers’ pay packets are not given a boost of more than 10 per cent.
Union leaders seized on the latest inflation data to ratchet up their demands for salary rises.
They also outlined plans for industrial action to add to fears of a looming ‘summer of discontent’.
Official figures showed inflation has now soared to an eye-watering 40-year high with the headline CPI rate rising to nine per cent in April.
The RPI rate, which also takes into account housing costs, stood even higher at 11.1 per cent last month.
This is the rate that is used by many trade unions in their pay claims for public sector staff and other workers.
Immediately after the inflation figures were released, unions demanded Chancellor Rishi Sunak come forward with an emergency budget to deal with the cost-of-living crisis.
They also warned of strike action if wage rises were not forthcoming and took a fresh swipe at Bank of England Governor Andrew Bailey – who this week doubled down on his controversial call for workers to show restraint when asking for pay increases, in order to avoid exacerbating inflation.
The fresh warnings of industrial action in the weeks to come add to concerns about chaos on Britain’s rail network this summer as unions plot a nationwide strike.
The RPI rate, which also takes into account housing costs, stood even higher at 11.1 per cent last month
Sharon Graham, the general secretary of the Unite union, said that ‘alarm bells are ringing very loudly now’ as she reiterated her warning of strike action
Responding to today’s inflation figures, Sharon Graham, the general secretary of the Unite union, said that ‘alarm bells are ringing very loudly now’.
‘Earnings are being pummelled, the government is, shamefully, turning its back on those in need and employers are squeezing wages,’ she added.
‘So, we will absolutely take no more lectures on pay restraint from the millionaire governor of the Bank of England.’
Reiterating her union’s threat of strikes, Ms Graham said: ‘Unite’s answer to the current crisis is that employers who can pay decent wages but won’t will face industrial action.
‘I can tell you that we don’t intend to shift from that.’
TSSA general secretary Manuel Cortesm whose union is currently mulling a nationwide rail strike, called for the Chancellor to present an emergency budget ‘within days’.
‘The Government has repeatedly failed to understand the extent of the crisis facing the average citizen never mind those on low incomes,’ he said.
‘Ministers must now change direction and take action to reduce energy bills and boost pay.
‘The alternative is unthinkable, because it will see many people forced to choose between heating and eating.’
TUC general secretary Frances O’Grady pointed to the Covid pandemic as showing how ‘the Government can act to help business and workers if they want to’.
‘The Chancellor must step up with an emergency budget that helps families with a boost to Universal Credit and the minimum wage, and we urgently need a windfall tax on oil and gas to fund energy grants for struggling households,’ she added.
Mike Clancy, general secretary of the Prospect union, called for ministers to ‘get real’ and introduce an ’emergency budget to provide more support with energy bills and an end to real terms cuts in pay for public sector workers’.
Unison general secretary Christina McAnea also demanded ’emergency support’ for hard-pressed Britons from ministers.
‘Boosting benefits and lifting public sector wages above rising costs are a must if families are to have any hope,’ she said.
Gary Smith, GMB general secretary, said: ‘Pay dropping at the same time as inflation runs rampant could spell disaster for too many working people.
‘Real wages have suffered their biggest drop for a decade – yet the boss of the Bank of England still thinks people shouldn’t ask for a pay rise.’
Unions demanded Chancellor Rishi Sunak come forward with an emergency budget to deal with the cost-of-living crisis
Transport Secretary Grant Shapps this week warned unions that plans widespread rail strikes will sit ‘very badly’ with taxpayers who forked out to save the industry during Covid.
He questioned why union leaders were pushing ‘hugely damaging’ and ‘self-defeating’ industrial action at a time when railways are still recovering from the impact of the pandemic.
The Rail, Maritime and Transport Workers Union (RMT) are currently balloting more than 40,000 members working across 15 train operators over a possible national rail strike.
The action, over pay, jobs and conditions, could begin as early as next month and would potentially be the ‘biggest rail strike in modern history’, according to the union.
The RMT today announced London Underground workers at two Tube stations are to strike on one of the Jubilee bank holidays in a row over bullying.
The Transport Salaried Staffs’ Association (TSSA) are also mulling a nationwide rail strike, while Unite has floated strike action among its rail workers – including on the London Underground.
Boris Johnson (right), Grant Shapps (centre) and Sadiq Khan (left) took a ride on the Elizabeth Line this week to mark its completion – but there are fears rail services will be disrupted by strikes this summer
RMT general secretary Mick Lynch has urged his union’s members to vote in favour of strike action on Britain’s railways, while TSSA boss Manuel Cortes has demanded an emergency budget ‘within days’
There is a prospect of Britons being subject to a ‘summer of discontent’ as widespread strikes cause misery on the rail network
Mr Shapps said strikes were the ‘last thing the country needs’ as the UK continues its recovery from the Coronavirus crisis.
‘We’ve supported a network that was carrying nobody,’ the Cabinet minister told The Times, as he pointed to the £16bn emergency bailout handed to railways during Covid.
‘Taxpayers have generously supported it, pitching in £600 a family towards saving the railway.
‘The idea that the thanks people then get is a strike will, I think, sit very badly with people.’
As well as a pay dispute, union leaders are warning of strikes in a bid to get guarantees there won’t be compulsory redundancies or ‘detrimental’ changes to working practices.
The RMT have also claimed 1,000 ticket offices across the rail network are at risk of closure.
But the Transport Secretary insisted the network ‘must update itself’.
‘I’m very confident about the prospects of the railway but why damage that now with a hugely damaging strike that is self-defeating, for a railway which must update itself?,’ he added.
‘Travel patterns have changed, the way people buy their tickets has changed. The idea that work practices don’t change is clearly nonsense.’
RMT general secretary Mick Lynch has urged his union’s members to vote in favour of strike action in order to ‘bust the pay-freeze, save your conditions and to ensure your job security’.
‘Train operating companies have praised our members for being key workers during the pandemic but have refused to keep staff pay in line with inflation and soaring living costs,’ he said last month.
‘As a result, thousands of railway workers have seen their living standards plummet and have run out of patience.’