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.
ADVERTISEMENT
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.
ADVERTISEMENT
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.
ADVERTISEMENT
“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
Hot Blobs – Retro drink makes return to Manchester Christmas Markets, but what is it?
Daisy Jackson
It’s funny how we all turn a blind eye to the temperature outside when it comes to the Christmas Markets.
At a time of year where should probably all be hibernating inside, droves of us instead head out to brave the elements all in the name of the festivities.
Of course, the Manchester Christmas Markets sell all sorts of wares to take the edge off, and we’re not just talking about the stalls selling woollen mittens everywhere.
Our favourite winter warmers tend to take the form of a tray of piping hot garlic potatoes, or a mug of hot chocolate, or another boozy beverage that’s massively underrated.
The drink in question is a Hot Blob, which is listed on the menu at the Piccadilly Gardens markets as ‘legendary’.
A bold claim, but a lot of long-time Manc residents will understand why.
The Hot Blob is a jaw-clenchingly sweet concoction served piping hot at the Manchester Christmas Market, similar to a hot toddy.
It’s made with Australian fortified white wine, lemon, sugar, and boiling water.
Hot Blobs – Retro drink makes return to Manchester Christmas Markets, but what is it? Credit: The Manc Group
The drink was first invented by Yates, that well-known pub chain, which started life as Yates’s Wine Lodge up the road in Oldham.
According to Pubs of Manchester, the Hot Blob has a tendency to ‘speed up drunkenness to a young drinker’.
These days, it’s pretty rare to come across one on a menu, but back in 1990s it was a staple in a few pubs around town.
There even used to be a ‘Blob Shop’ on High Street, run by local legend Ged Ford (now in charge of the equally legendary Millstone pub), which found itself in a state of utter carnage when the IRA bomb went off.
The long-lost institution specialised in ‘cheap wine, cheap beer, and plenty of blobs’.
The old Yates Blob Shop on High Street, Manchester. Credit: deltrems@flickr
Ged sold 6,000 a week.
And while the drink may have fallen out of favour since then, there are still healthy numbers being sold at this time of year, even if they are a damn sight more expensive than they were in the 1990s (£6 a pop, plus a glass deposit).
Anyway. If you’re sick to the back teeth of the endless gluhwein being peddled across the markets, make a beeline for Manchester Winter Ale House at Piccadilly Gardens, where you can find Hot Blobs as well as boozy Vimto and cask ales.
The Manchester Christmas Markets officially end on 22 December.
Where to find the cheapest drinks at the Manchester Christmas Markets, from beer to mulled wine
Daisy Jackson
The main gripe people seem to have with the Manchester Christmas Markets is the prices of food and drinks, blasting them every year like a broken record as being ‘overpriced’.
So we’ve done the hard slog for you, running all around the city centre to suss out exactly how much everything is costing in 2024.
From Piccadilly Gardens (rebranded as The Winter Gardens for the season) to King Street, there are wooden sheds and festive cheer absolutely everywhere.
There’s some brilliant food and drink to discover – you can see our top picks HERE – but as this is a huge visitor attraction, that can come at a price.
Once you factor in the deposit for a Manchester Christmas Markets mug, you can easily spend £12 just to get a mulled wine (though you will get £3.50 of that back when you return your mug).
There are also deposit charges on glassware – £2 for a pint glass, £3.50 for cocktail glasses and £7 for a stein.
You can see the full list of prices for food and drinks right across the Manchester Christmas Markets HERE, but below are where you can find the cheapest spots at the festive event.
Mulled wine
Mulled wines are priced at £5.50 almost everywhere across the Manchester Christmas Markets, though some stalls are offering bigger serves of this popular festive drink for a small price hike.
Then people are charging another £3 to add a shot of brandy, rum or amaretto, making an £8.50 total.
But the cheapest we’ve found is just £7 for mulled wine with a shot of booze, and that’s at Mamma Mia, an Italian stall on New Cathedral Street, right near St Ann’s Square.
Where to find the cheapest drinks at the Manchester Christmas Markets, from beer to mulled wine. Credit: The Manc Group
Beer
Again, prices for beers at the Manchester Christmas Markets are pretty consistent and average £6 a pint.
But you can get cheaper – at The Last Outpost, a Western-themed bar at Exchange Square, beers start from £5.50.
And at The Hip Hop Chip Shop at Piccadilly Gardens, they’re selling local craft beers, like Shindigger, Pomona Island, Manchester Union) for just £5.50. And you get bonus good vibes for supporting local breweries.
Wine
We’ve found a couple of glasses of wine for just £5 around the Markets this year, which is cheaper than most bars in town really.
The King Street Craft Bar, which has the bonus of having seating, has house wines from a fiver.
Christmas Alley at Piccadilly Gardens will also give you a wine for £5.
Prosecco
Prosecco works in every season and if this is your go-to of all the drinks at the Manchester Christmas Markets, we’ve found where you can save a few pennies.
Most places are charging between £6.50 and £7 per glass, but at El Gato Negro on King Street (yep, the same stall operated by the Michelin-recommended restaurant) are charging just £5 – that’s a whole £1.50 cheaper than most other stalls.
Hot chocolate
Basic hot chocolates are generally £3.50 everywhere, with a few very luxury upgrades (like a £7.90 creation from The Flat Baker that’s served in an edible cookie cup).
Once you add in a shot of alcohol, the cheapest as at the Apres Ski Bar at Piccadilly Gardens, which charges £2.50 for a spirit.
Georgina Pellant -
23rd May 2023 
