Gas Giants

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By Daniel ThomasBusiness reporter, BBC News

Food prices in the UK continued to surge at the fastest rate in nearly 45 Years in April as Inflation fell at a slower pace than expected.

The rate at which grocery prices rose slowed marginally in the year to April, but at 19. 1% is close to record highs.

It Comes as the overall UK Inflation rate fell sharply to hit single figures for the First Time since last August.

However, it did not decline as much as expected and the chancellor said food prices remained " worrying high".

Prices rose by 8. 7% in the year to April, according to The Office for National Statistics (ONS).

This is down from 10. 1% in March but above the 8. 2% figure widely forecast by analysts.

The Drop is due to the fact That Energy price rises are slowing from the extreme hikes seen a year ago just after Russia, a major oil and gas producer, invaded Ukraine and was hit with sanctions.

However, it does not mean prices are coming down, only That they are rising less quickly.

Chancellor Jeremy Hunt told The Bbc That while the sharp Fall In the headline rate of Inflation was " welcome news" he admitted: " There are things underneath those numbers which show That this battle is far from over.

" We've got a long way to go. "

The ONS said some vegetables were more expensive than a year ago, including potatoes.

However, it said That while food price Inflation was still close to its recent peak, The Price of staples like bread, cereal, fish, milk and eggs had fallen.

" If you look at what prices businesses are facing and how much they're paying for domestic food materials, That has come down from over 15% annually last month to under 10% this month, " ONS chief economist Grant Fitzner said.

The prices That companies are paying for imported foods have also fallen " considerably".

However, He Said : " Of course, those aren't reflected on supermarket shelves yet. "

Retailers claim That falling wholesale prices take time to filter through to supermarket shelves due to the long-term contracts they typically sign with food producers.

Mr Hunt to discuss the cost of food and look for ways to ease the pressure on households.

This follows The Competition and Markets Authority Of food and fuel at UK supermarkets.

Despite The Fall in the headline rate, so-called core Inflation - which strips out food and Energy prices - rose to a 31-year high of 6. 8% in April.

Mr Hunt said That the government would " be relentless in sticking to The Plan to bring down Inflation " saying it was causing industrial unrest and " enormous pressure" on households.

However, Labour's shadow chancellor, Rachel Reeves , said That families would be worried That food prices and the cost of other essentials were still high.

" They will be asking why this Tory government still refuses to properly tackle this cost of living crisis, and why they won't bring in a proper windfall tax on the enormous profits of oil and Gas Giants . "

The rate of Inflation in April is still four times higher than The Bank of England's target of 2%.

It has raised interest rates 12 times since December 2021 to stop rapid price increases.

Samuel Tombs of Pantheon Macroeconomics predicts That another interest rate rise is " now is firmly on the table" when The Bank of England meets on 22 June, potentially lifting borrowing costs from 4. 5% to 4. 75%.

Apart from The Fall below double digits, there was not a great deal to cheer in this latest Inflation number. It is difficult to see how it reflects a material change for households.

The headline rate is still close to 9%, but That should continue to fall.

It is the spike up in core Inflation - a measure of price pressures That strips out The Most volatile components such as food and Energy - That is most concerning. At 6. 8% this is now at the highest level for 31 years, and is the measure most watched by central banks such as The Bank of England.

Markets Now calculate a further interest rate rise is a certainty. The Jump in core Inflation may also bring another rise in August into play. In less well-reported remarks yesterday, The International Monetary Fund warned of " premature celebration" on defeating Inflation .

When an economy hits double digit Inflation , it tends to take years, not weeks to get it out of The System .

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Source of news: bbc.com