Commodity crisis sparks fear of food inflation on high street
Warning that rise in wheat and barley prices will hit household budgets – and may force increase in interest rates
By James Thompson and Sean O’Grady
Tuesday, 10 August 2010
A spike in food-price inflation over the coming months is set to hit household budgets and pile the pressure on the Bank of England to raise interest rates, an influential research firm has forecast.
Grocery-price inflation is on track to jump from 2 per cent to 4 per cent by the end of the year, according to the market research firm Kantar Worldpanel, as events such as fires and droughts in Russia and Ukraine lead to soaring prices of wheat, barley, palm oil, cocoa, animal feeds and meat.
Other, industrial, commodity prices have been rising for some months, in response to demand from resurgent emerging economies such as China and India. These too will feed through to high-street inflation next year.