Ukraine and Russia are major players in the global food production industry, accounting for 53% of the global trade in sunflower oil and seeds, and 27% in wheat prior to the war, as reported by the United Nations.
High inflation in Britain was initially fueled by surging energy and fuel prices, which are now starting to decline. However, this decline is being offset by rising food prices, which have become a significant contributing factor.
According to the Centre for Economics and Business Research, households are now spending £5,312 more on everyday expenses, including food and energy bills, compared to 2021. It is projected that costs will increase by an additional £1,061 next year, resulting in a total rise of £6,373 over a span of three years.
The CEBR’s head of forecasting, Kay Neufeld, remarked, “With inflation declining slower than anticipated and mortgage rates rising dramatically, the cost-of-living crisis is expected to persist in the next 12 months.”
Rising prices
The consumer prices index (CPI), a measure of inflation, reached its peak at 11.1% in October of the previous year but continues to remain high at 8.7%.
While oil prices are falling, concerns remain regarding supermarkets increasing fuel prices excessively. This led the Commons’ Business and Trade Committee to question supermarket executives last week. Motoring groups, including the RAC, have accused retailers of being sluggish in passing on the reduction in wholesale prices.
The Competition and Markets Authority (CMA) initiated an investigation into supermarkets in May and discovered that some supermarkets had raised their profit margins on petrol and diesel.
Food prices have been affected by the rising costs of fertilizers, transportation, and animal feed following the invasion of Ukraine, as well as an egg shortage caused by avian flu. However, supermarkets have also faced allegations of exploitative pricing strategies.
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