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Home » Produce Shortages Drive Surprise Jump in UK Inflation

Produce Shortages Drive Surprise Jump in UK Inflation

A COLORFUL ARRAY OF FRUITS AND VEGETABLES
March 22, 2023
SupplyChainBrain

The cost of living in the U.K. rose more than expected last month as salad and vegetable shortages helped push up food prices at the fastest rate in 45 years.

BBC News reports that alcohol prices in restaurants and pubs also drove up costs for households, as inflation jumped to 10.4% in the year to February from 10.1% in January. Clothing costs, particularly for children and women, rose last month but fuel prices continued to fall.

The surprise figures come ahead of a decision on interest rates on March 23. The U.K.'s central bank, the Bank of England, will decide whether to increase, lower or hold rates as it continues its battle to curb inflation.

It has put up interest rates 10 times since December 2021, as it seeks to make borrowing money more expensive and encourage people to spend less, with the aim of stopping prices rising so quickly.

Tomatoes, peppers and cucumbers were among the goods affected as extreme weather in Spain and North Africa impacted harvests, and high energy prices hit growers in the U.K. Problems with supply chains also contributed to the problem.

Along with higher prices for milk, olive oil and eggs, the ONS said the shortages helped push food inflation to 18.2% — the highest since 1978.

ONS chief economist Grant Fitzner told the BBC the longer-term outlook was "not quite as bleak." He said inflation was set to fall this summer as energy prices come down.

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