Hard-pressed households faced more misery last month as food costs soared to record rates in February, new official figures show.
Annual food product inflation has now reached 8.4% – the highest since records began in 1986 – according to the Office for National Statistics (ONS)
Rising meat prices were the main culprit behind soaring costs as fresh and preserved meat costs increased 5.5% between January and February.
Food manufacturers, such as bread maker Hovis, have also been labouring under soaring wheat costs.
Yesterday’s figures showed imported cereal product prices up more than 6% over the month and surging by almost 47% in the year to February.
Manufacturing firms’ raw materials prices also rose at record rates after fresh peaks in crude oil costs, which rose 3.3% over the month, as well as higher metal prices.
Overall factory gate inflation was sustained at 16-year highs of 5.7%, continuing the headache for policymakers on the Bank of England’s Monetary Policy Committee (MPC) charged with keeping a lid on prices.
Global Insight’s chief UK economist Howard Archer said: ‘The weaker pound reinforced the upward pressures coming from high oil, metal and food prices.
‘This further jump in input prices maintains pressure on manufacturers to try to raise their prices to support their margins.’
The ONS data also showed manufacturers staging a surprise comeback in January. The sector saw output grow by 0.4% between December and January after two months of decline.
The hints of recovery and elevated inflation levels will add weight to the MPC’s caution over cutting rates too quickly. Last week it voted to hold borrowing costs unchanged at 5.25%.
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