Food Prices Up 7% as Bank Looks at Interest Rates
CASH-STRAPPED consumers were hit with a 7% rise in food prices last month as shops hiked the cost of goods by their highest rate for at least 18 months, a survey revealed yesterday.
The British Retail Consortiumshop price index showed that price tags across the board rose by 2.5% year-on-year in June, pushed higher by the rocketing food costs.
Shoppers also faced the first increase in the cost of non-food goods since the survey began in December 2006, according to the BRC.
The results will make grim reading for Bank of England policymakers, who started their two-day monthly meeting on interest rates yesterday.
The Bank'sMonetary Policy Committee is widely expected to leave rates on hold at 5%as mounting data signals no let up in inflationary pressures.
Yesterday's BRC figures show that annual food price inflation has jumped from 4.7% in April, to 6% in May and 7% last month.
But the annual rise in non-food costs - 0.2% more expensive last month against at least 18 months of deflation - may be amore worrying sign of inflation, said economist Howard Archer. …