Food prices up as fuel price soars

More food increases after fuel crisis?

Food prices are always dependent on logistical possibilities, and at the beginning of May prices in the food retail industry are up to a 12 month high, thanks to the rising cost of fuel.

Within the food inflation increased from 1.2 percent in March to 2 percent last month, while non-food inflation edged up to 2 percent in April from 1.3 percent in March.

The British Retail Consortium-Nielsen Shop Price Index found that costs rose due to increases in commodity prices in items such as oil and cocoa, but that the overall rate of inflation is still below the rates recorded in December and January.

Non-food prices also saw a significant hike from 1.3 per cent in March to two per cent last month.

The news comes as wider inflation levels are also moving higher - reaching 3.4 per cent in March, which was higher than expected.

That has raised fears among some experts that fuel costs could see inflation rise further still.

The weakness of the pound has also pushed up import costs for retailers.

"With commodity prices going up food prices were almost bound to rise when compared with last month's three-year low.

"Even so, food inflation is a quarter of what it was this time last year while some produce - milk, cheese and eggs - is actually cheaper than 2009.

"Oil, which is up 70 percent over the year, also influenced some non-food prices. VAT is also higher than a year ago.

"But the main effects of rising costs and the weak pound have now been felt. With demand still weak, shop prices should be more stable in future months, as long as there are no more big shocks."

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