The price of food and other goods will continue to mount in 2022 as Britons grapple with a cost of living crisis that will see energy bills, national insurance contributions and mortgage payments all climb too.
Annual price inflation reached 0.8 per cent in December, up from 0.3 per cent in November according to figures from the British Retail Consortium (BRC). Retailers will continue to increase their prices, and more quickly than before, this winter, while they face cost pressures of their own from within their supply chains, the BRC has warned.
Inflation on fresh food jumped three per cent in December, compared to 1.2 per cent the previous month, marking the largest increase since April 2013. Ambient food, such as canned and other pre-packaged goods, was not as badly hit, though inflation accelerated to 1.7 per cent, up from 0.9 per cent.
Helen Dickinson, chief executive of the BRC, said the outlook for shoppers in 2022 is “very clear” – prices will “continue to rise and at a faster rate” because retailers are no longer able to soak up additional costs resulting from challenges including the nationwide HGV driver shortage.
Ms Dickinson said: “Consumers may have noticed that their Christmas shop became a little more expensive in December. Not only did prices rise, but [they] did so at a faster rate, especially in food,” said Helen Dickinson, chief executive of the BRC.
She continued: “The trajectory for consumer prices is very clear – they will continue to rise, and at a faster rate.
“Retailers can no longer absorb all the cost pressures arising from more expensive transportation, labour shortages, and rising commodity and global food prices.
“Consumers will already be harder pressed this year, with rising energy bills, the looming hike in national insurance, and more expensive mortgages. Government should relieve some of these costs by looking for long-term solutions for resolvable issues such as labour shortages.”
Soaring wholesale gas prices prompted the energy regulator to raise the energy price cap in October, with another increase likely to come into effect in April. In the same month, National Insurance contributions will rise by 1.25 percentage points, from 12 per cent to 13.25 per cent, further squeezing consumers.