Food prices continue to surge as inflation remains at 3.8%

Official estimates indicate that food inflation rose at its fastest pace in a month in ten months in August, the fifth month in row, with prices accelerating at its slowest rate since the start of last year. At an annual rate of 5. 55 percent, the cost of food and non-alcoholic beverages increased at a rate of 5. 5 percent. As beef, butter, milk, and chocolate prices increased, they soared by 1%. However, amid the rise in food prices, inflation in other areas, such as air fares, slowed, leaving the overall rate of inflation at 3. 8% - the same as July. Food bills have increased because supermarkets were passing on government increases in the minimum wage and National Insurance Contributions (NIC) to consumers, according to economists.

Overall, inflation remains above the Bank of England's 2% target, and hopes are increasing that the bank's rate-setting committee will hold interest rates on Thursday. Rachel Reeves, the government's tax and budget proposals, said she knew

families are finding it difficult, and that for several families, the economy is stuck.

I'm determined to bring costs down and help people who are facing higher bills,

she continued. Reeves announced an increase in National Insurance Contributions for employers last year, as well as a rise in the minimum wage. Many companies, who believed it would result in higher customer prices, retaliated as a result of the decision, which caused a backlash from many organizations. Reeves told companies that she would not be

coming back with more borrowing or more taxes,

but rumors that the chancellor will increase taxes are increasing. Price increases were

deeply worrying for families,

according to Shadow chancellor Sir Mel Stride, and Labour's tax plans are

stoking inflation. The Office for National Statistics (ONS), which publishes the data, said the figures, was 5. The highest rate for 19 months is a 1% rise in food and drink prices.

In addition, the UK's inflation was significantly higher than the estimates for large European economies such as France and Germany, according to the bank. In August, France's inflation was 0. The average price increase in Germany stood at 2. 8 percent, compared to 2. 1%. According to Yael Selfin, chief economist at KPMG UK, the United Kingdom had been an outlier in recent months on inflation relative to other major economies.

The rise in inflation has been largely fueled by domestic policy choices, including the increase in employers' National Insurance Contributions,

she said.

These higher prices have been passed on by employers to customers, extending to higher headline inflation.

Some food items have already seen significant rises. Beef and veal prices increased by nearly 25% in the year to August, while butter prices increased almost 19% and chocolate rose by 15. 4%. Food costs, according to the British Retail CONSortium (BRC), were outstripping average wage increases, which the ONS estimated at 4. 7% between May and July.

With food inflation now outpacing wages, many families will be struggling with the increasing cost of living,

Kris Hamer, BRC's director of insight, predicted.

However, the BRC said that the prices of some items, such as clothing and boots, had decreased, partly due to retailers discounting the last of their summer collections.

Key staples such as cereals and pasta dropped in price on the month,

it said.

The inflation figure, accordING to James Smith, a senior market economist at investment bank ING, was

definitely not good news for the Bank of England. It remained at 3. 2 percent, according to He who told the BBC that it was still at 3. The possibility of further interest rate cuts this year remains very much in the balance

at 8%.

In terms of where we come from here, food inflation could rise a little bit more into the year's end. Since August last year, the Bank of England has cut interest rates five times since August, lowering borrowing rates to 4%. It has been reported that inflation reached a peak in September at 4%. On Thursday, the central bank is widely predicted to hold interest rates. In November and December, the bank will have two more rate-setting meetings this year. Capital Economics said it is uncertain that the Bank would cut rates in November despite a predicted rise in inflation. However, Paul Dales, the Bank's chief UK economist, said:

We still expect the loosening labor market to slow wage growth and eventually bring down UK inflation to comparable levels as in the US and the eurozone, which will encourage the Bank of England to cut rates from 4% to 3% by the end of next year.

'NICs rise has stung'

Tom Egan, who co-founded and operates Coosh Bakery in Mapperley, Nottingham, with his partner Rachel, has been particularly affected by butter and chocolate prices.

Understanding weather in cocoa-growing nations, such as Ghana, has more than doubled the price we get from our suppliers,

he said.

I believe we were paying somewhere in the region of £60 for ten kilograms,

he said.

I believe it has now risen to over £150 for the same 10kg.

Butter prices have increased by 50% over the year,suppliers told Mr Egan thatthe true quantity of milk imported into the United Kingdom has dropped dramatically,

so clearly supply and demand have increased on things like butter. In the meantime, he said that the rise in National Insurance Contributions had

stung a little bit," causing the bakery to be more cautious about investing in areas such as machinery and electronics, which could increase productivity.