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
A huge new Irish bar has opened in Manchester city centre (yes, another one)
Daisy Jackson
There’s another new Irish pub in Manchester city centre, this time on one of our busiest nightlife strips, Peter Street.
Katie O’Brien’s has officially thrown open the doors to its enormous two-storey venue, taking over and transforming the former Peaky Blinders bar.
Inside, there are three bars pouring both Guinness AND Murphys, a huge elevated stage on its own mezzanine level, which will host live musicians seven nights a week, and walls packed with decor transporting you to the Emerald Isle.
The makeover they’ve given this massive unit really is quite something, creating all sorts of cosy corners and snug areas where you can nurse a pint of stout.
Faux fireplaces, leather booth seating, and low ceilings all set the tone for a relaxed pint in the snugs.
Or if you want something a little livelier, head to the heart of the bar, where you can dance the night away to the live entertainment above your head.
Manchester’s Katie O’Brien’s is set to be their largest Irish bar yet, with existing locations all over the UK, including in Leeds and Sheffield.
Their rapid expansion has now brought them to the heart of Manchester, where they’ll be neighbouring bustling nightlife spots like Albert’s Schloss, Manahatta, and Impossible.
Katie O’Brien’s has opened on Peter StreetIt’s taken over the old Peaky Blinders barCosy snugs in Katie O’Brien’sIt serves both Murphy’s AND Guinness
The venue has taken over what was once the Peaky Blinders bar, which shut down back in March.
The previous occupier had themed its venue and menu around the hit gangster show, with cocktails named after characters.
They wrote at the time: “It is with an extremely heavy heart that we unfortunately have to announce the closure of Peaky Blinders Manchester with immediate effect. On behalf of our entire team, we are truly thankful to every guest who has stepped through our doors since opening in 2018.
“We are devastated it has had to end this way, but grateful for the journey. Thank you so much for your continued support over the years. It’s been a blast, Manchester!”
Katie O’Brien’s is open now on Peter Street in Manchester.
One of Manchester’s most popular brunch spots is opening its second location
Daisy Jackson
A brunch spot with queues down the street, and an edible Labubu French toast on the menu, is opening a second location this summer.
Bruncho has revealed plans to expand from its home on Deansgate and take on the Northern Quarter.
The all-day brunch cafe is set to move into the huge unit left empty by the shock closure of Feel Good Club.
Bruncho is known for its brunch dishes that have a real knack for going viral on social media, including New York-style breakfast rolls in croissant bread; fresh coconut water and matcha served in the coconut; and its absolutely stacked French toasts.
It’s consistently packed out at its original location on Deansgate, and now it’s taking over a 4,378 sq ft unit in the Northern Quarter too, set to open this June.
Omer Umut Mutlu, owner of Bruncho, said: “Manchester has shown Bruncho so much love, and expanding into the Northern Quarter feels like the natural next step for us.
“Hilton House gives us the space to elevate what we do – more covers, more events, and a new home for the kind of food and atmosphere people will make the journey for.
The viral Labubu French toast at Bruncho in ManchesterA breakfast spread at Bruncho
“We’re excited to bring something fresh to the neighbourhood, with the opening scheduled for June 2026.”
Paul Shakeshaft, Head of Property Management at CERT, commented: “We’ve found the ideal tenant to join the Hilton House community. Bruncho provides a new focal point for the building and for the community.
“They’re a fantastic operator with big plans that bring the right fit and the right atmosphere to the building and neighbourhood.
“Signing Bruncho brings Hilton House back to full occupation, including a full refit in just seven months, underpinning our neighbourhood vision for our commercial properties, and their continued success and appeal far beyond their completion.”
Bruncho will open their second Manchester cafe in the Northern Quarter this June.
Georgina Pellant -
23rd May 2023 
