Food inflation is at a 45-year high, with a supermarket boss warning that grocery prices will remain high this year. Overall UK price inflation fell for the third month in a row to 10.1% in the year to January from 10.5% in December. The biggest factors in the rate slowing were decreases in fuel prices and the cost of dining out.
To calculate inflation, which measures the increase in the price of something over time, the Office for National Statistics (ONS) keeps track of the prices of hundreds of everyday items. If it falls, it does not mean the prices of goods are going down, it just means prices are rising more slowly. Many analysts believe inflation will continue to fall, although it is still currently five times the Bank of England's target of 2%. Olive oil, sugar and low-fat milk prices have all increased by more than 40% in that time.
Matt Hood, managing director of Co-op Food, which has more than 2,500 UK stores, said prices continued to rise in January as costs for grocers did, making it "incredibly tough".
But in the case of olive oil, prices have been higher in recent months largely due to summer heatwaves hitting crops in Spain, a huge exporter of the product. Kyle Holland, oils analyst at data firm Mintec, said production in Spain was down to 720,000 metric tonnes, from the usual 1.5 million.