Data from the Organisation for Economic Cooperation and Development (OECD) show consumer price index (CPI) inflation increased to 3.1 per cent across all items in the 12 months to July. That is up slightly from three per cent the month before.
The UK experienced higher inflation than the average of the OECD’s 34 member nations, at 4.4 per cent.
Energy and food prices changed most dramatically among all members, rising by 4.5 per cent and 13.5 per cent respectively.
The biggest increases come in energy prices. US consumers are facing 19 per cent rises in 12 months, with UK prices up 10.7 per cent.
Food prices face serious upside risks in coming months. Poor harvests in the US in particular – which accounts for half of all corn exports – is putting upward pressure on prices.
Already analysts say fierce competition has cut margins, meaning consumers are not yet fully exposed to rising prices.
“Faced with the lowest consumer confidence since the recession began, shops have maintained high promotion levels,” said Mike Watkins of Nielsen, whose separate study, out yesterday, showed food prices had risen five per cent in the year to August.