Fall in petrol prices hides 'worrying news' about cost of everyday foods

·Political Correspondent, Yahoo News UK
·3-min read
A shopper walking through the aisle of a Tesco supermarket in London. Picture date: Saturday September 3, 2022.
Food inflation is continuing to soar despite a drop in consumer price index (CPI) inflation. (PA)

New figures that show a slight drop in inflation hides a "worrying" rise in food costs, experts have warned.

The Office for National Statistics (ONS) said on Wednesday that Consumer Prices Index inflation reached 9.9% in the year to August, down from 10.1% the previous month – a 40-year high.

The slight drop has been driven by motor fuels reducing in price, which hit record highs over the summer.

However, the figures also show that food inflation is continuing to soar - hitting its highest August level since 2008.

In the 12 months to August 2022, food inflation rose by 13.1%, up from 12.7% in the 12 months to July, amid the worsening cost-of-living crisis.

Read more: Martin Lewis seeking 'urgent clarification' of energy bills for people on fixed rates

The increase between July and August 2022 is the largest since 1995 and is being driven by rising costs of stables like milk, cheese, and eggs.

The figures have sparked concern among experts, with the IPPR progressive thinktank urging the government to announce more help.

"Many people will welcome CPI inflation easing slightly this month... [however] it hides worrying news that the prices of food and clothing are continuing to accelerate upwards," George Dibb, head of the centre for economic justice at the IPPR, said.

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Liz Truss' energy rescue package will freeze energy bills at £2,500 for two years. (Ofgem)

“High inflation means high prices, and without intervention this will lead to more hardship, more poverty and more destitution.

"The government’s price cap on energy for households and businesses is a welcome step but it won’t instantly reduce the inflation in essentials such as food and clothing that we see today.

"This goes to show why the price cap policy alone is not enough. The most vulnerable households on the lowest incomes still require more support through the welfare system.”

The government announced on Wednesday last week it plans to freeze the energy bill price cap at £2,500 for two years - protecting households from an 80% jump on 1 October to £3,549.

Read more: Liz Truss likely to visit US and hold mini-budget next week

In her first major intervention as prime minister, Liz Truss said it will save the average household £1,000 this winter and help with the rising cost of living.

However, like Dibb, many experts warned more help will be needed this summer despite the government's estimated £150bn energy bill rescue package.

Rachelle Earwalker, senior economist at the Joseph Rowntree Foundation, said the announcements won't help those already struggling with rising costs.

"This price freeze is BIG and it will bring some comfort on looming energy bills, BUT it doesn't boost support for those on the lowest incomes to meet other costs like food or rent this winter," said Earwalker.

"And it only meets the scale of energy bills when combined with already announced £1200."

Watch: Cost of living crisis: Martin Lewis shares advice for those struggling with debt