Rising food prices but still below 2014 levels
Food prices have recently been grabbing headlines, with the UK CPIH* recording a 2.4% year-on-year rise in August, to 106.5, according to data from the Office for National Statistics.
Overall, food recorded an increase of just over 2%. Food costs make up around 7% of the CPIH, while transport costs make up around 12% and recorded a 6% rise. Housing & utilities and furniture & maintenance costs combined, account for just over a third of the CPIH, and prices rose across all their subcategories.
The food category is broken down by weighting different food types related to their share of household expenditure. Meat accounts for just over a fifth of the category, and recorded a rise of 1.4%, while the cost of bread and cereals rose by just under 1%. The cost of fruit and vegetables also rose, by 2.5% and 3% respectively. Milk, cheese and eggs rose by 2.6%.
Other household costs recorded larger increases, with electricity, gas and other fuels together increasing by 7%, largely driven by rises in electricity prices. The cost of package holidays increased by 5%, which would also have been influenced by changes in the value of sterling.
While food prices have been recording increases recently, there was food price deflation from the start of 2014 until the middle of 2016. Between January 2014 and July 2016 food prices decreased by 7% (meat fell 8%), since then food prices have increased by 4% (meat prices have risen 3%). Currently, food prices are trending below late 2013/early 2014 levels.
*Consumer price index including owner-occupied housing
Rebecca Oborne, Analyst
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