Price of food to replace energy as biggest cost-of-living problem – think tank
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Food prices are set to overtake energy bills as the “epicentre” of the cost-of-living crisis, a think tank has warned.
The Resolution Foundation said on Friday that food prices would continue to rise even as energy costs are set to fall, with pressures from food inflation exceeding energy prices by the summer.
Lalitha Try, an economist at the think tank, warned that politicians in Westminster had not fully understood what the impact of rising food prices would be, saying: “The cost of living crisis isn’t ending, it’s just entering a new phase.”
Analysis from the Resolution Foundation said inflation was expected to fall significantly when the latest figures are announced on May 24 as the effect of 2022’s large increase in energy bills begins to drop out of the annual calculation.
If you’re already buying own-brand essentials at the supermarket, you can’t trade down to a cheaper alternative
The same week is also expected to see confirmation that energy prices will actually fall when Ofgem announces changes to the energy price cap on May 25.
But food prices are expected to keep rising, having already increased by 19.1% in the year to March, placing additional pressure on families.
Torsten Bell, chief executive of the Resolution Foundation, warned that rising food prices would force low-income households to eat less.
He said: “When the price of some food products rise, consumers switch to others. But that strategy isn’t available in the same way to those on lower incomes.”
He added: “If you’re already buying own-brand essentials at the supermarket, you can’t trade down to a cheaper alternative.
“What happens instead? Poorer households have to cut rather than adjust their consumption – which is another way of saying they eat less.”
A recent Resolution Foundation survey found a fifth of people were already eating less or skipping meals, with the proportion even higher among low-income households, people on benefits, black families and those in large households.
Mr Bell said the analysis supported the Government’s decision to target cost-of-living assistance at low- and middle-income households, but called for more support for larger families.
He said: “Policymakers should not jump to the view that falling energy bills mean the job of supporting households through this crisis is complete.”
