Brits are facing a cost of living crunch on all fronts in 2022, reveal fresh figures released today.
Prices in shops accelerated 0.8 per cent in annually in December, just the second time prices have risen in over two years, according to the British Retail Consortium (BRC).
The rise has been driven by food retailers passing on swelling costs stemming from a severe labour squeeze and rising transport prices.
Food prices are 2.4 per cent higher compared to last year, the fastest rate of growth since March 2019, the BRC said.
Helen Dickinson, chief executive of the BRC, said: “Food prices were falling earlier on in 2021, but the acute labour shortages across supply chains, amongst other factors, led to the year ending with a notable increase; for example, fresh food saw the largest rate of inflation in almost a decade.”
The BRC’s figures reinforce the scale of the soaring cost of living that is set to spike households across Britain this year.
Overall inflation is expected to hit six per cent this April, driven higher by the energy regulator, Ofgem, hiking the cap on prices energy suppliers can charge customers to account for the skyrocketing cost of wholesale gas.
Energy firms are also expected to pass on the cost of having to absorb customers from suppliers that have buckled under the weight of higher wholesale gas prices.
Looming tax hikes in April in the form of a 1.25 percentage uplift in employee national insurance contributions and dividend taxes will add to the strain on Brits’ finances.
Research carried out by the economic think tank the Resolution Foundation found the average households in the UK will see their bills swell £1,200 this year, leading the organisation to dub 2022 the “year of the squeeze”.
Dickinson warned households should brace for food prices continuing on their upward trajectory over the course of this year.
“The trajectory for consumer prices is very clear: they will continue to rise, and at a faster rate,” she said.
“Retailers can no longer absorb all the cost pressures arising from more expensive transportation, labour shortages, and rising commodity and global food prices.”
“Consumers will already be harder pressed this year, with rising energy bills, the looming hike in national insurance, and more expensive mortgages.”