UK shoppers continue to have their budgets squeezed by soaring food prices amid high inflation.
Households faced a worse-than-expected hit in July as grocery prices spiked and pushed Consumer Prices Index inflation (CPI) to 10.1%, the Office for National Statistics (ONS) has revealed.
The 40-year high was mainly down to rising costs of food and staples such as toilet rolls and toothbrushes.
Inflation had been expected to reach 9.8%, according to an average of analysts’ estimates calculated by Pantheon Macroeconomics.
It is the biggest jump in the cost of living since February 1982, when CPI reached 10.4%, according to ONS estimates.
It is also a massive jump from the 9.4% inflation in June.
The ONS said that food and non-alcoholic beverage prices increased by 12.7%, a rise from 9.8% the month before and the highest since August 2008.
Which food items are going up in price the most?
All 11 food and non-alcoholic beverage categories tracked by the ONS rose in July, with the biggest impact on staple items.
Low-fat milk increased by 34% in the last 12 months up to July, while whole milk shot up by 29.1%
Flour rose by 29.7%, with butter costing an extra 27.1% and pasta 24.4%.
Food and Drink Federation chief executive Karen Betts sent a dire warning earlier this week that grocery prices could rise even higher.
She told PolicticsHome: "We don't think that food price inflation has peaked yet.
“We've been seeing ingredients and energy rising in cost for more than a year now and those input costs are finding their way through into food prices, but there is still some way to go."
Watch: Struggling households face more pressure as cost of living rises 10.1% in July
Meanwhile, separate figures show shoppers are switching to own brand products in a bid to bring down the cost of their baskets.
Reported sales of own-label value products increased by almost a fifth – 19.7% – as shoppers sought to make savings, according to data from research firm Kantar.
Fraser McKevitt, head of retail and consumer insight at Kantar, said: “As predicted, we’ve now hit a new peak in grocery price inflation, with products like butter, milk and poultry in particular seeing some of the biggest jumps.
“This rise means that the average annual shop is set to increase by a staggering £533, or £10.25 every week, if consumers buy the same products as they did last year.
“It’s not surprising that we’re seeing shoppers make lifestyle changes to deal with the extra demands on their household budgets.”
Data also showed consumers were now shopping around more and switching supermarkets in response to the cost-of-living crisis.
Lidl was again the fastest growing supermarket chain, with sales up by 17.9% over the last 12 weeks.
Rival German discounter Aldi also performed strongly, reporting 14.4% growth, as customers were attracted to the two firms’ cheaper product lines.
Tesco was the strongest performer among the UK’s biggest grocers, reporting 1% growth.
Meanwhile, Asda saw sales increase by 0.2% and Sainsbury’s recorded a 0.1% dip.
The worst performer of the big four was Morrisons, which saw sales decline by 4.9%.