Economy warning: 'Early sign' of inflation hit in the UK as food prices surge
WATCH: GB News speaks to people in Birmingham about how the rise in inflation will affect them
GB News
Food prices have recorded their sharpest monthly increase since April last year, signalling an "early sign of what is to come" when it comes to the economy, according to latest figures.
The data, released by the British Retail Consortium (BRC), shows food prices jumped by 0.5 per cent between December and January.
This rise was particularly pronounced in ambient food products, which saw a one per cent increase driven by higher prices for sugary products, chocolates and alcohol.
Year-on-year figures show food prices were 1.6 per cent higher in January compared to the previous year, though this marked a slight easing from December's 1.8 per cent.
Fresh food inflation decreased to 0.9 per cent from 1.2 per cent in December. The cost of ambient food products showed a similar downward trend, dropping to 2.5 per cent in January from 2.8 per cent the previous month.
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Britons have been forced to contend with inflation hiked prices GETTY Overall shop prices experienced deflation of 0.7 per cent in January, a slower rate compared to December's one per cent.
BRC chief executive Helen Dickinson said: "Extensive January sales was good news for bargain hunters, with non-food products showing significant discounts, particularly for furniture and fashion, but less good news for retailers needing to shift excess stock."
"This month's figures also showed early signs of what is to come, with month-on-month food prices rising at their fastest pace since April last year," she added.
She noted that ambient food saw a one per cent jump as prices spiked for sugary products, chocolates and alcohol.
Food prices are on the rise in a blown to consumers
GETTY
Furthermore, Dickinson warned British consumers that the current price cuts and deflation may not continue for much longer.
The retail chief emphasised that retailers will soon face the full impact of £7billion in new costs announced at the last Budget by Chancellor Rachel Reeves.
During her fiscal statement, Reeves confirmed various policy changes impacting businesses, including higher employer National Insurance contributions, an increased national living wage, and a new packaging levy.
"Prices are expected to rise across the board," she cautioned. Mike Watkins, head of retailer and business insight at NielsenIQ, highlighted ongoing consumer uncertainty about spending.
He noted that many households continue to experience pressure on their incomes. "We expect non-food retailers to still promote and food retailers to still offer price cuts over the next few weeks," Watkins said.
Watkins added that shoppers are adapting their behaviour by "managing their budgets by shopping smart and shopping around for wherever the savings are the most attractive."
LATEST DEVELOPMENTS:
Consumer confidence is plummeting across the country
GETTYLast week, figures from consultancy firm GfK found that consumer confidence slipped five points in December to - 22 as households became more pessimistic about their economic prospects.
Rocio Concha, Which? Director of Policy and Advocacy, said: "These findings echo our latest research which saw consumer confidence in the future economy fall to -49, the lowest levels seen since December 2022 when the inflation rate was in double figures.
"Consumer confidence and business confidence are two sides of the same coin and pursuing one at the expense of the other would be self-defeating.
"To increase consumer confidence and boost economic growth, the government should encourage effective competition among responsible firms and take action against businesses which break the rules."
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