Food to overtake energy bills in driving up UK cost of living crisis
Until now, the cost of living crisis has been most closely associated with energy bills - but soon food costs will overtake energy as the main inflation driver.
Food costs are set to overtake energy bills in driving up UK inflation this summer, a new report has warned.
The report by the Resolution Foundation has found that the cost of living crisis – until now dominated by sky-high energy bills – will soon be driven by rocketing food prices, once again hitting poorer UK households the hardest.
According to the report, whilst energy prices have risen faster in the UK it is still food that makes up the largest share of a typical household’s outgoings.
As a result, as food prices continue to rise whilst energy bills fall back this summer it is predicted that the cost of eating will become the biggest threat to people’s finances.
Food prices have increased by 25 per cent over the past year and a half, greatly impacting the squeeze on living standards in low and middle-income households.
And now, grocery bills are expected to increase again over the summer.
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According to the thinktank behind the report, it was not clear that politicians were currently prepared for another year of food price rises or that “policy debates have caught up with the scale of what is going on”.
Food price inflation reached around 19 per cent in March, the highest in almost half a century. As a result, the report asserts that food prices will be ‘contributing far more than energy to CPI inflation through the remainder of 2023.’
The report said: “By this summer, food costs will have overtaken energy bills in the scale of the shock they are administering to family finances.”
The Resolution added that it can also model the scale of the impact across individual households, suggesting that this summer 16 million households (56 per cent) will face a big shock when it comes to paying for their food.
The Bank of England governer Andrew Bailey told business leaders earlier this month that he was ‘concerned’ that food and other non-energy prices would remain elevated.
Typically, food prices in the UK fall in the summer as locally-grown crops replace those imported from abroad.
However, factory gate prices for milk, meat and other foods have accelerated, in some cases by more than 50% year on year.
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The Resolution Foundation’s report, Food for Thought, says food prices are expected to contribute “more to overall inflation than energy” in the months ahead.
“Between March and September 2023, food prices are expected to contribute around 2 percentage points to inflation each month, while the contribution of energy prices is set to fall from 3 percentage points to less than 1,” the report estimates.
The cost to the nation from higher food prices since the 2019-20 financial year would be £28bn by the end of the summer, compared with an extra £25bn cost from higher energy prices, it added.
Lalitha Try, one of the report’s authors, said: “Everyone realises food prices are rising but it’s less clear that the scale of the increases has been understood in Westminster.”
“What rising food prices have in common with surging energy bills is that they pose a greater challenge to lower-income households, who spend a higher proportion of their income on food – 15%, compared with 10% for the highest-income households in 2019-20.
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“As a result, the effective inflation rate for the poorest 10th of households was almost 50% higher compared with the richest 10th of households in March.”
Featured image – RawPixel
Eats
Pubs can extend their opening hours if England make it to the Euro 2024 semi-finals
Emily Sergeant
Pubs are to be permitted to extend their opening hours if England make it through to the semi-finals of EURO 2024 this summer.
With the Premier League, and the English and Scottish football leagues, all drawing to a close over the next couple of weeks, our nations are already looking ahead to what is gearing up to be a massive summer of sport – with both the UEFA EURO 2024, and the 2024 Olympics coming up before August is out.
And now, it’s been revealed by Home Secretary James Cleverly that if either England or Scotland’s mens national football teams make it to the semi-final of European football’s flagship tournament, then pubs will be allowed to stay open for longer.
But, there’s a bit of a catch… because isn’t there always?
The Government has said that venues will be allowed to stay open for an extra two hours on match days if either or both teams reach the last four or the final of the competition, but this only applies to pubs that already have a license to open until 11pm anyway.
The move to extend opening hours comes after a consultation at the end of last year, and is hoped to provide a boost to the hospitality industry – which has notably been hit hard during the ongoing cost of living crisis.
The Home Secretaries in England and Wales, under Section 172 of the Licensing Act 2003, can make an order relaxing licensing hours to mark occasions of “exceptional national significance”, but the Scottish and Northern Irish Governments have to set their own rules.
“We have listened to the public through our consultation,” explained Home Secretary James Cleverley, “and we will be extending pub licensing hours should England or Scotland reach the semi-finals or final of Euro 2024.”
The EURO 2024 semi-finals are to be held on Tuesday 9 and Wednesday 10 July / Credit: UEFA
Mr Cleverley said the move will “allow friends, families and communities to come together for longer to watch their nation hopefully bring it home”.
This legislation is set to be laid in Parliament today (Wednesday 8 May) to ensure there is enough time for it to be debated and passed before the tournament begins on Friday 14 June, the Government has confirmed.
Crown & Kettle team confirm takeover of infamous Mother Mac’s pub
Daisy Jackson
The team behind the Crown & Kettle pub have taken on a new challenge – the legendary Mother Mac’s pub on Back Piccadilly.
The boozer, which has something of a gruesome past, is being almost completely gutted ready for its transformation into a three-storey pub.
Soon to be reborn as The Rat & Pigeon, the independent watering hole will have seven separate areas across its three floors.
Since The Manc first reported the closure of Mother Mac’s, the team behind Crown & Kettle have been busy stripping the city centre pub back to its bones.
They said in a statement online that the historic building has been left ‘rotting behind a veneer of naff refurbishments’ (the pub changed hands a few years ago).
The Rat & Pigeon has been given vital structural support ready for the next stage – ‘breathing life into this historic boozer’.
They said it’s taken 16 skips, a few electric shocks, and ‘an eight week stint at the chiropractors’, but now pictures inside the pub show that it’s coming on nicely.
The floors on the first and second floor have been restored to their former glory and there are even paint samples on the walls now.
The Rat & Pigeon wrote: “They say you shouldn’t pick at a scab. The thing is, over the years this building has been slowly rotting behind a veneer of naff refurbishments plastered one on top of the other. We haven’t just picked the scab, we’ve peeled entire layers and took it right back to the bone… and then found the bones were buggered n’all.
“In for a penny, in for a pound.
“16 skips, multiple electric shocks and a 8 week stint at the chiropractors later we managed to tear out the crap and provide the old lady with the structural support required to see out the next 150 years.
They later added: “Transforming a tired ground floor only pub into 3-floor behemoth isn’t without its challenges.
“Once the building was structurally secure we turned our attention to the 1st and 2nd. With every layer of plaster removed or board lifted we were uncovering new ‘challenges’. It got to a point where we were scared to take a peek. But peek we did.
“Debris carted down two flights of stairs, full fixed wiring and plumbing throughout, new structures built and plaster applied with floor lovingly restored to its former glory – our vision to breathe new life into this historic boozer is starting to become a reality.
“There’s 7 separate areas over three floors, each with its own purpose and appeal – something for everyone. We genuinely cannot wait to welcome you in.”
The official launch date, and the full transformation of Mother Mac’s into The Rat & Pigeon, will be announced soon.