Digital Zeitgeist – Vegetable Shortages Are To Blame For The Unexpected Surge In UK Inflation
The cost of living increased more than was anticipated over the previous month due to shortages of lettuce and vegetables, which contributed to food costs increasing at the quickest pace in 45 years.
Inflation accelerated to 10.4% in the year leading up to February from 10.1% in January, as a result of higher pricing for alcoholic beverages at dining establishments and public establishments.
The cost of clothing went up last month, notably for women’s and children’s apparel, while the price of petrol continued to go down.
These unexpected data have surfaced in advance of a decision that will be made about interest rates on Thursday.
While the fight against inflation continues, the Bank of England, which serves as the central bank for the United Kingdom, will determine whether to raise, cut, or maintain interest rates.
Since December 2021, it has increased interest rates ten times in an effort to make borrowing money more costly and encourage people to spend less. This is done with the intention of bringing down the pace of inflation as rapidly as possible.
The Office for National Statistics (ONS) monitors the prices of hundreds of different commonly used products in order to compute inflation, which is a measure of how prices fluctuate over time.
It was said that the ongoing increase in the cost of food had been a significant component in February’s inflation number. This came at a time when stores were facing shortages of some salad items and vegetables.
Tomatoes, peppers, and cucumbers were among the foodstuffs that were impacted as a result of the adverse effects that severe weather had on harvests in Spain and North Africa, as well as the high energy costs that hurt producers in the UK. In addition, there were issues with the supply chains, which added to the situation.
The Office for National Statistics (ONS) said that shortages, in conjunction with rising costs for milk, olive oil, and eggs, contributed to food inflation reaching 18.2%, the highest level since 1978.
So called “core inflation” – which strips out items such as food, energy, alcohol and tobacco which can fluctuate in price – also unexpectedly rose jumping from 5.8% to 6.2%.
The shocking increase in inflation was “depressing” according to Grant Fitzner, the head economist for the ONS. Prior to February, inflation had decreased for three months in a row. On the other hand, he told the BBC that the prognosis for the longer term was “not quite as bleak”
He predicted that inflation will go down this summer due to the declining price of electricity.
Lucianne Allen is the director of sales and marketing for Aubrey Allen, which is based in Coventry and has a retail store in Leamington Spa in addition to its wholesale operations.
She mentioned to the BBC that the expenses of shipping and packaging were two sectors that had seen significant growth.
“We’ve had to pass on some of that cost in the last 12 months, but we’ve absorbed some of it.
“I hope we’ve seen a peak [in price rises] but inflation continues to be very real and very present.”
The United Kingdom has one of the highest rates of inflation among the world’s major industrialised countries. Chancellor Jeremy Hunt said slower price rises were “not inevitable”.
“We recognise just how tough things are for families across the country, so as we work towards getting inflation under control, we will help families with cost-of-living support worth £3,300 on average per household this year,” he added.
Rachel Reeves, the shadow chancellor for the Labour party, said that the most recent data demonstrated that “nothing” in the economy of the United Kingdom was functioning better than it had 13 years ago, when the Conservatives were in office.
In light of recent concerns regarding the security of the banking sector, many economists had anticipated that the Bank of England would maintain its current interest rate of 4% on Thursday; however, following the release of the inflation figures, most economists anticipate that the rate will increase to 4.25% from 4%.
online sources: bbc.co.uk, ons.gov.uk