The biggest jump in food prices since 1980 pushed British inflation back into double digits last month, matching a 40-year high hit in July in a new blow for households grappling with the cost-of-living crisis.
The Office for National Statistics said the consumer price index (CPI) increased by 10.1 per cent in annual terms in September, up from 9.9 per cent in August.
Food and non-alcoholic beverages prices were the biggest driver of inflation in September as they rose by 14.5 per cent, the biggest jump since April 1980 according to historic modelled estimates of the CPI.
Hotel prices also increased in September, the ONS said.
"Today's release highlights the danger that underlying inflation remains strong even as the economy weakens," said Paul Dales, chief UK economist at consultancy Capital Economics.
He pointed to rising core inflation, a measure that excludes volatile food and energy prices, which hit a new 30-year high of 6.5 per cent.
Britain has been hit hard by the surge in European natural gas prices caused by Russia's invasion of Ukraine, which has added to post-COVID supply-chain bottlenecks and labour shortages, creating an intense squeeze on living standards.
"I understand that families across the country are struggling with rising prices and higher energy bills," Chancellor Jeremy Hunt said in a separate statement.
"This government will prioritise help for the most vulnerable while delivering wider economic stability and driving long-term growth that will help everyone."
The government has been rocked by chaos in markets in the wake a budget that pledged uncosted tax cuts.
The majority of those measures have since been reversed, leaving Prime Minister Liz Truss fighting to save her job.
Following widespread criticism over the budget, Truss sacked Hunt's predecessor, Kwasi Kwarteng, after less than six weeks in the role.
Analysts said Wednesday's data would put pressure on the Bank of England to keep raising its main interest rate by sizeable amounts.
Capital Economics noted that the BoE could hike its rate by as much as one percentage point to 3.25 per cent at its next meeting in November.
Ministers are getting under pressure to impose taxes on packaged foods containing high content of salt and/or sugar.
In a plea addressed to the chancellor, Rachel Reeves, and the health secretary, Wes Streeting, representing 35 health groups, it is highlighted that taxing unhealthy foods such as cakes, sweets, biscuits, crisps and savoury snacks would generate billions of pounds for the Treasury and cut the number of people becoming ill as a result of a bad diet.
The signatories include groups representing the UK’s doctors, dentists and public health directors, health charities including Diabetes UK and the World Cancer Research Fund, and a senior figure in the chef Jamie Oliver’s organisation.
Anna Taylor, the executive of the Food Foundation, which also signed the letter, said, “The damage the food industry is doing to children’s health is the biggest threat to our nation’s wellbeing and future productivity and this needs to be reined in – urgently.
“The government must now get bolder, creating real incentives to force the industry to align with public health goals, further and faster.”
The health groups want ministers to start tightly regulating the food industry. They said relying on the industry to voluntarily clean up its act nutritionally, as the previous Conservative governments did during 2010-24, had not yielded meaningful change.
“Voluntary reformulation programmes for sugar, salt and calories are not proving effective enough, achieving only a 3.5 per cent reduction in sugar levels of key product categories, compared to the mandatory soft drinks industry levy (sugar tax), which has achieved a reduction in total sales of 34.4 per cent between 2015 and 2020,” the letter says.
Jamie O’Halloran, a senior research fellow at the IPPR, said: “Without bold regulatory changes, our food system will continue to fall short in promoting healthy lifestyles, particularly for those on the lowest incomes.
“Expanding levies to cover other high-sugar and ultra-processed products could be transformative, especially if the resulting revenue is used to support low-income households to make healthy food choices.”
A government spokesperson said: “Obesity is a significant health challenge, which affects 26 per cent of adults and costs the NHS £11.8bn per year.
“The budget took action to ensure the soft drinks industry levy maintains its incentive to encourage healthier soft drinks, and we will publish a 10-year health plan in spring 2025.”
This comes a week after Reeves announced in the budget that the Treasury was looking into whether the sugar tax, which came into effect in 2018, should be extended to other very sweet products, including milkshakes and highly sugared coffees as it is widely regarded as having been a success.
Earlier, a YouGov poll showed public support on such taxes as long as the revenue is ploughed into children’s health.
The representative survey of 4,943 British adults by YouGov, commissioned by food campaigners’ Recipe for Change initiative, also found that 74 per cent think food firms are not honest about the health impact of their products while 61 per cent worry about the amount of sugar and saturated fat in what they eat.
Only 13 per cent believe producers will make their food more nutritious without government intervention while 72 per cent worry about high levels of processing used in food production.
Tireless work by the Federation of Independent Retailers (the Fed) Contact Centre has seen almost a quarter of a million pounds recovered from news wholesalers in 2024.
The latest figures show that £187,130 has been recovered in missing credits, missing vouchers and recharges, as well as money saved through waived deposits for news wholesale accounts.
A further £40,338 was recovered in restitution for instances of late supply or missing supply having an impact on home news deliverers, taking the overall total paid back to members this year to date to £227,468.
“Once again our Contact Centre has delivered for members," said The Fed’s National President, Mo Razzaq. "This is testament to the tireless work of the team, ensuring Fed members are not left out of pocket when things go wrong.
“The amount of money the team has recovered in 2024 is further proof that, for independent retailers, it really does pay to be a member of the Federation.”
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PayPoint unveils new partnership with Leeds Credit Union
PayPoint unveils new partnership with Leeds Credit Union
PayPoint and Northern Ireland electricity supplier, Share Energy, have announced a new partnership that will provide pre-payment customers with convenient payment solutions available immediately at PayPoint locations.
The partnership means all pre-payment Share Energy customers can now top-up their electricity meters in any one of PayPoint’s 1,167 stores in Northern Ireland.
Share Energy brings an innovative, customer-first approach to the energy market, with its attractive profit-share revenue model poised to drive rapid, large-scale customer growth. The partnership with PayPoint ensures that robust payment services and infrastructure are in place to support this anticipated demand.
The partnership further demonstrates Share Energy’s commitment to enhancing customer experience, complemented by PayPoint’s dedication to leveraging technology to improve payment services and the end-user experience.
“We’re proud to be supporting Share Energy through the provision of an accessible and convenient payment service for its customers," said PayPoint Head of Business Development, Ian Ranger. "As we enter the colder months topping up energy meters will become an essential task for many. Through our network of retailers in Northern Ireland we’re pleased to provide a close and easy payment solution with this partnership. Our network allows customers to combine daily errands at a store close to home and experience a quick and streamlined payment service.”
Damian Wilson, Share Energy CEO, added: “We are excited to partner with PayPoint, as this collaboration strengthens our commitment to delivering a seamless, customer-focused experience.
“With PayPoint’s advanced payment solutions, we are well positioned to support our rapid growth and provide our customers with reliable, convenient options that enhance their experience with us.”
Shoppers' spending on FMCG saw a rise in the third quarter of this year, shows a latest industry data, revealing a narrowing gap between own-label and branded products as the growth rates indicate shoppers are now starting to treat themselves to small indulgences again.
According to latest NIQ Retail Spend Barometer, value growth in the FMCG sector was driven by an uptick in the personal care (+10.7 per cent), homecare (+8.7 per cent), fresh food (+5.8 per cent), and snacking (+5.1 per cent) categories. Beverages returned to growth (+2.1 per cent), from a decline of 0.9 per cent in Q2. Meanwhile, the biggest declines were experienced in tobacco (-7.9 per cent) and paper products (-4.1 per cent).
NIQ attributed the rebound largely to the sales boost from the Euros and Olympics, which took place in July and August, and slightly sunnier weather compared to last year. Despite improved consumer confidence in Q2, this stalled in Q3 as economic and financial uncertainty continued to impact consumers. However, within FMCG, lower inflation is now leading to better volume growth.
The NIQ data also reveals a narrowing gap between own-label and branded products as the growth rates indicate shoppers are now starting to treat themselves to small indulgences again. In Q1 of this year, FMCG branded unit growth was recorded at 0.7 per cent compared to 3.1 per cent for own-label. However, in Q3 branded unit growth sits at 1.1 per cent versus 1.7 per cent for own-label.
Ben Morrison, Retail Services Director UK & IRE at NIQ, said: “The first eight months of the year so far have been more optimistic compared to 2023, but shoppers remain cautious. We are seeing more considered purchasing, particularly within T&D as consumers opt to replace products when they must rather than upgrade a working one.
"This also plays to the desire for more sustainable living – beyond just energy efficiency – which is adding to the decision process. When it comes to upgrades, credit schemes offer immediate gratification and are used more often by those on higher incomes to enable upgrades for non-essential big-ticket items”.
“As for FMCG, retailers will be pleased to see a slight increase in the rate of growth in the sector in Q3, largely boosted by the big sporting events over the summer. With the gap closing between branded and own-label items, shoppers are open to spending on certain items.
"However, building financial resilience remains a challenge for consumers. According to GfK’s Consumer Confidence Barometer, a quarter of consumers reported they were ‘just managing’ at the end of Q3 and 1 in 3 said they were unlikely to be able to save in the year ahead. Shoppers, therefore, remain cautious, so as we enter the golden quarter, promotions across retailers are going to be key in persuading savvy shoppers to trade up.”
Halloween combined with Diwali celebrations and early fireworks events proved a blessing for retailers as the two boosted footfall across all UK destinations for the second consecutive week.
MRI Software data shows that footfall rose by +6.9 per cent last week compared to the week before in all UK retail destinations; high streets drove much of this rise with an +8 per cent rise in footfall recorded, followed closely by shopping centres (+7.9 per cent). Retail parks also witnessed a week on week rise however this was much more modest at +3.3 per cent.
A strong start to the week paved the way for a fruitful half-term for retailers as footfall rose by +16.1 per cent in all UK retail destinations on Sunday, compared to the week prior. Shopping centres and high streets averaged a rise of +12 per cent and +11.7 per cent, respectively, from Sunday to Friday. Retail parks, however, saw a much more modest rise of +4.8 per cent for the same time period.
According to Jenni Matthews, marketing and insights director at MRI Software, a "spooktacular" half-term week saw a week-on-week boost in footfall across all UK retail destinations for the second consecutive week, highlighting the impact of the school holidays and events on driving visitors and shoppers to retail destinations.
However, for context, it’s worth noting that in the same week last year, footfall had declined during the same period as schools had already reopened nationwide.
Matthews said, “From Sunday to Friday, high streets saw the strongest daily gains compared to the week before with shopping centres following a similar trend. Retail parks also witnessed daily week on week rises however these were much more modest and may be due to half-term events taking place in shopping centres and high streets driving much of the footfall to these destinations.
“All town types experienced substantial rises in footfall both year on year and compared to last week which is an indicator of the shift in the school half-term holidays. Coastal towns experienced the greatest rise suggesting many continued to getaway for what may be the final time this year before Christmas. Despite forecasted tube strikes for the end of the week, which were called off at the eleventh hour, footfall in the capital also remained strong particularly in office dense areas."
Regionally, Wales and Greater London saw strong performance week on week however the East of England saw double digit growth compared to 2023. The trends seen in Wales and Eastern parts of England may also align with the strong trends seen in coastal towns.
Coastal towns were the clear winners last week as footfall rose by +10.5 per cent from the week before but by almost a fifth compared to 2023 highlighting the impact of the school holidays on footfall in towns and cities across the UK. Historic and market towns also witnessed significant year on year rises of +13.1 per cent and +10.5 per cent, respectively. Footfall in Central London remained +7.4 per cent higher week on week and +18.6 per cent higher compared to last year despite the threat of tube strikes which were called off at the last minute.