UK families face highest inflation in Western World as food prices rocket and pound plunges

By Sean Poulter, Consumer Affairs Editor
Updated: 04:53 EST, 2 June 2010

Rising food bills have driven Britain's inflation rate to the highest in the Western World.

The UK's Consumer Price Index (CPI) figure of 3.7per cent is two or three time higher than similar economies across Europe and beyond.

New figures from the Organisation for Economic Co-operation and Development (OECD) suggest British families are suffering far more than counterparts across the globe.

The 3.7per cent figure compares to just 1per cent in Germany, 1.1per cent in the Netherlands, 1.5per cent in Italy and Spain, 1.7per cent in France, 1.8per cent in Belgium.

The figure has actually fallen by 2.1per cent in the past year in Ireland and by 1.2per cent in Japan.

Britain's burgeoning bill: The food inflation rate in this country is put at 2.8per cent. This compares to 1.2per cent in Germany, 0.8per cent in France, 0.7per cent in Belgium

Britain's higher inflation comes at the same time as millions of workers have suffered a freeze or even a cut in working hours and pay. While the latest figures show an increase in unemployment.

The net effect is a bigger squeeze on living standards than most other countries surveyed by the OECD with warning of public sector job cuts and tax rises to come.

Only countries like Greece, Turkey, Hungary and Mexico are doing worse in terms of general inflation.

Families, pensioners and others see most evidence of the UK's inflation in terms of higher food bills. The high cost of petrol has eased slightly in recent weeks.

The food inflation rate in this country is put at 2.8per cent. This compares to 1.2per cent in Germany, 0.8per cent in France, 0.7per cent in Belgium.

In fact food in many nations is actually cheaper than it was a year ago. The fall in Ireland is 7.1per cent, while it is won 1per cent in he Netherlands, 1.9per cent in Spain and 0.2per cent in Italy. There has been no change in the USA.

One reason for the increase is the fact that British supermarkets impose large quantities of food from overseas. The fall in the value of the pound has made these imports more expensive.

However, even home grown produce is considerably more expensive than a year ago, according to separate research by MySupermarket.co.uk.

Its figures for May, picked up a 20per cent increase on both cauliflowers and cucumbers. There was a 26per cent rise on a pack of mixed peppers.

Bread, eggs and butter are also up by more than 3per cent in the past year.
The nation's supermarkets insist that they are helping shoppers survive the recession with a mix of price cuts and other promotions. However, this appears to be at odds with the fact the 'big four' - Tesco, Asda, Sainsbury's and Morrisons - continue to post record profits.

Just last week, Asda announced plans to buy up the budget chain Netto, which claims to offer cheaper prices than the big four, in a deal worth £778million.

In April, Tesco announced record profits for last year of £3.4billion, which equates to around £6,500 a minute or £107 a second.

The British Retail Consortium denied shoppes get a raw deal.

Its food director, Andrew Opie, said: 'UK food prices are consistently lower than other EU countries. The inflation rate doesn’t tell you about actual prices.

'Our latest analysis shows despite commodity prices, such as oil and cocoa, going up – food inflation in the UK is a quarter of what was this time last year.

'The value of the pound against the dollar and euro is important in determining food prices. Sterling has recently been weak against these two currencies, which has had an adverse impact on food inflation in the UK.'

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