Buy 'value brands', cabinet minister says, as shop prices increase at fastest rate in more than a decade

·3-min read

A cabinet minister has been accused of being out of touch after suggesting that consumers facing the biggest rise in shop prices in more than a decade should buy "value brands".

The 2.7% year-on-year increase in prices, reported by the British Retail Consortium-NielsenIQ price index, was the highest since September 2011 and up from 2.1% in March.

George Eustice, the environment secretary, said that it would "undoubtedly put a pressure on household budgets" already facing soaring energy bills.

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He told Sky News: "Generally speaking, what people find is by going for some of the value brands rather than own-branded products - they can actually contain and manage their household budget."

Labour's shadow chief secretary to the Treasury Pat McFadden said: "This is woefully out of touch from a government with no solution to the cost of living crisis facing working people.

"People are seeing their wages fall, fuel and food costs rise, and families are worried about how to make ends meet."

Liberal Democrat work and pensions spokeswoman Wendy Chamberlain said the comments showed "the Conservatives are living in a parallel universe".

Read More: Will it be the cost of living crisis or partygate that decides at the polls?

She added: "Families and pensioners who can't afford their weekly shop need more help, not patronising advice from a clueless minister."

Further data from the Bank of England, showing a 10.6% increase in credit card borrowing in March compared to last year - the highest growth since 2006, appeared to add to evidence of the squeeze on consumers.

Laura Suter, head of personal finance at AJ Bell, said the £800m increase showed "how much the cost of living crisis is really hitting households, with many already forced to put essential bills on their credit cards".

The latest figures will increase the pressure on Boris Johnson to do more to address the cost of living crisis, coming just a day before the local elections.

Helen Dickinson, chief executive of the BRC, said: "The impact of rising energy prices and the conflict in Ukraine continued to feed through into April's retail prices."

Food prices grew by 3.5% in the year to April, up from 3.3% in March.

But the increase slowed slightly for fresh food, from 3.5% in March to 3.4% in April, which Ms Dickinson attributed to "fierce competition between supermarkets".

"Global food prices have reached record highs, seeing a 13% rise on last month alone, and even higher for cooking oils and cereals," she said.

"As these costs filter through the supply chain, they will place further upward pressure on UK food prices in the coming months.

"Retailers will continue to do all they can to keep prices down and deliver value for their customers by limiting price rises and expanding their value ranges, but this will put pressure on them to find cost savings elsewhere.

"Unfortunately, customers should brace themselves for further price rises and a bumpy road ahead."

Read more: See how much your spending has increased over the past five years

Mike Watkins, head of retailer and business insight at research firm NielsenIQ, said consumers are likely to curb their spending habits in response to growing inflation and rising living costs, like energy bills.

The Bank of England has warned that inflation - which reached 7% in March - could exceed more than 8% this year.

"With food retailing no longer immune to these pressures, supermarkets are reacting by cutting the prices of some everyday grocery products," he said.

Prices for products other than food went up by 2.2% in the year to April - the highest rate since records began in 2006.

This compares with an increase of 1.5% in the year to March.

Ms Dickinson said furniture, electricals and books are seeing the biggest surges.

"This has been exacerbated by disruption at the world's largest seaport, following Shanghai's recent lockdown," she said.

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