Soaring Food and Energy Prices to Remain Pain Points for UK Economy in 2023, Forecasts Globaldata

The cost-of-living crisis in the UK is becoming increasingly severe as millions of people struggle to keep up with soaring prices, par ticularly for essential goods like food and energ y The overall inflation rate in the UK is expected to remain stubbornly high at 6 8% in 2023, far above the Bank of England’s inflation target of 2% In par ticular, the food and energ y inflation rates are forecast to reach 7 2% and 16 7% respectively, exacerbating the financial burden on households and businesses across the countr y, predicts GlobalData, a leading data and analytics company

Although the overall inflation rate in the UK eased for the third consecutive month to 10 1% in Januar y 2023, it stayed above 10% from September 2022 onwards Food and energ y inflation stayed above 15% and 88%, respectively, from October 2022 onwards Prices of all food items remained above 15% in Januar y 2023 including milk, cheese , and eggs (31 1%), oil and fats (26 7%), bread and cereals (16%), fish (15 7%), vegetables (15 5%) and meat (15%)

On the other hand, the prices of electricity, gas and other fuels increased by 89 5% in Januar y 2023 compared to 22 7% in Januar y 2022 High energ y inflation in Januar y 2023 was mainly driven by 129 4% rise in the prices of gas, and 66 7% rise in the prices of electricity, on an annual basis

Arnab Nath, Economist at GlobalData, comments:

“The outbreak of bird flu, rising cost of production due to higher cost for feed and energ y continue to remain the key concern for the domestic producer of vegetables eggs meats and other dair y products

“On the external side , bad weather conditions in Spain and Morocco, the UK’s key impor t par tners of agricultural products resulted in the shor tages of farm produce seriously challenging the food security However, the food supply shor tage is expected to ease in next three to four months as fresh farm producers just planted vegetables in Februar y 2023 instead of December 2022, according to Lea Valley Growers Association (represents 80 growers across the UK) ”