UK food inflation up 19%, highest rate in 45 years

Consumer price inflation (CPI) in the UK dropped only slightly in March to an annual rate of 10.1%, the Office for National Statistics (ONS) said on Wednesday.

That’s down from 10.4% in February but well above the 9.8% forecast by economists polled by Reuters and the 9.2% predicted by the UK central bank in February.

Food and non-alcoholic drink price inflation hit 19.1%, the most since 1977.

Milk and sugar cost around 40% more than a year ago.

The ONS said the UK inflation rate it was driven by record increases in costs for bread, hot beverages and chocolate and confectionery.

The UK was the only country in western Europe with double-digit inflation in March.

The UK’s headline inflation rate is now the highest in western Europe and compares with an average of 6.9% in the euro zone and 5% in the United States.

The inflation increases the chances that the UK central bank will raise interest rates again in May.


Ed Monk, associate director of personal investing at Fidelity International: “It’s now clear the UK has an inflation problem that is worse and more persistent than in Europe and the US.

“Price rises here are proving more difficult to neutralise and the Bank of England will almost certainly add at least one more quarter-point hike to borrowing costs.”

Victoria Scholar, Head of Investment, Interactive Investor: “While price pressures eased for motor fuels, clothing, restaurants, and hotels but upward effects remain from food and drinks, recreation and culture.

“Food and non-alcoholic drinks inflation rose from 18.2% in February to 19.2% in March, the highest level in 45-years, driven by bread and cereals inflation which hit a record high.

“Core inflation which strips out the more volatile components like energy, food, alcohol, and tobacco rose by 6.2% year-on-year, also ahead of expectations for 6%.

“Although there have been growing expectations for a dovish pause from the Bank of England in May, today’s hotter-than-expected inflation data with price pressures stuck above 10%, could tip the balance towards another 25-basis point increase at its next decision meeting.”

Marcus Brookes, chief investment officer at Quilter Investors: “Having surprisingly jumped last month, inflation has once again started its slow march down from the double-digit growth we have become accustomed to.

“However, we are still not below the 10% mark, a level we have not been at since August, what now seems like an age ago. This inflation problem is persisting and the fact is it remains at eye watering levels. With fairly punchy estimates and the government hitching its wagon to halving inflation by the end of the year, it will be hoping it falls at a faster rate than just a few decimal percentage points each month.

“Nevertheless, consumer confidence is beginning to return and the economy may not be as harmed by this cost of living crisis as first feared. For as long as the economy can hold up, the Bank of England will keep the option of interest rate rises firmly on the table.

“With the headline rate of inflation eventually coming down to hopefully more palatable levels, there will be an increased focus on what is going on under the bonnet with core inflation. This measure failed to shift in March and this will be a real concern to the BoE. Should that fail to fall meaningfully in the next couple of months, then more aggressive monetary policy from the BoE may be required yet again.”

Lily Megson, policy pirector at My Pension Expert: “Following last month’s shock increase, Britons will welcome the return of slowing inflation. But we are far from the finish line; the threat to people’s finances prevails as inflation remains at eye-watering levels.

“For many, the concept of a financially secure retirement, after years of hard work and diligent saving hangs in the balance.

“Indeed, My Pension Expert’s latest research revealed that almost half (44%) of over-55s currently in work feel the cost-of-living crisis has rendered retirement entirely impossible.

“People need support, and they need it now. The Government must commit to taking steps to granting all Britons access to the necessary information to help them regain control of their financial futures.”