Surging prices of tea and coffee kept the price of a fry-up near record levels even as food inflation in Britain finally shows signs of easing.
Coffee prices rose 4.7% in June compared with the previous month, with tea not far behind jumping 4.2%, according to the latest Bloomberg Breakfast Index. Prices of some agricultural commodities have soared this year because of supply constraints with the cost of a full English breakfast hitting £35.78 ($46.14) in June, up £4.32 from more than a year ago.
The index crunches data from the UK Office for National Statistics (ONS) on the price of sausages, bacon, eggs, bread, butter, tomatoes, mushrooms, milk, tea and coffee. In June, the only items to record a fall in price were bread, tomatoes and blocks of butter.
Still, annual inflation for food and non-alcoholic beverages eased slightly to 17.4% in June, according to the ONS, echoing data earlier this week showing the sharpest drop in grocery prices since hitting a peak in March.
Food inflation in Britain could be past its worst now, according to Tim Steiner, chief executive officer of Ocado Group Plc. Although there could still be a time lag before a positive effect is seen in stores, as rising interest rates continue to bump up mortgage and rent costs, Steiner said.
“Efforts by retailers to curb price rises and reduce inflation appear to be paying off,” said Helen Dickinson, chief executive of the British Retail Consortium. “However, supply chains remain volatile.”
All the elements of the English breakfast saw price gains over the last year. Eggs are almost 30% more expensive than in June 2022, while bread and milk are up 24.3% and 23.6% respectively over the same period.
Under political pressure to pass on easing cost inflation to consumers, supermarkets have been cutting prices in recent months. Representatives of Tesco Plc, J Sainsbury Plc, Asda and Morrisons insisted they are keeping prices as low as possible during a recent round of questions from politicians.
Britain’s cost-of-living crisis is starting to ease for consumers, thanks to wage increases but the real test will be whether incomes rise faster than inflation by the end of the year, said Lisa Hooker, industry leader for consumer markets at PwC.
© 2023 Bloomberg