According to a think-tank, the rising cost of food is set to overtake the high cost of energy, to become the driving force behind the already rising inflation, over the summer. The food cost will have a harder effect on poorer households.
According to the Resolution Foundation, grocery bills have rocketed by almost 20% during the past year which will continue to increase and replace energy prices that are expected to begin falling over the next few months.
Official figures predicted to show a fall in the annual rate of inflation in April by about two percentage points from the 10.1% for March. For households and businesses that have come under intense financial pressure from rising prices, a drop to single digits will be a relief. However, the pace of decline is expected to slow as the price of food push up.
The Bank of England, when it increased interest rates to 4.5% last week, warned that it was concerned about inflation, as measured by the consumer prices index (CPI), falling more slowly this year than it previously expected. The inflation forecast for the fourth quarter of 2023, was also increased from 3.25% to more than 5%.