How Fuel Prices Affect: The Bank of England has warned that inflation could reach 11 per cent during 2022 – the highest rate in 40 years. While this can be seen most obviously in the spike in fuel prices, it also affects the prices you’ll see on your supermarket shelves. Below, we explore the current state of inflation in the UK and the impacts you might see on your groceries.
The far-reaching effects of inflation
No industry is truly immune from inflation. Indeed, across industries in the UK, you’ll notice that your costs and bills are rising. For a start, natural gas prices have risen by 95.5 per cent. Meanwhile, electricity has risen 53.5 per cent, furniture and maintenance have risen 10.7 per cent, restaurants and hotels eight per cent and food and non-alcoholic drinks have gone up by 6.7 per cent. All of this means that it’s hard to find products and services that haven’t been affected by inflation.
Knock-on effect of fuel prices
One of the main effects of the increase in fuel prices is that they’ve also contributed to food inflation. This is because fuel is necessary throughout the food supply chain to keep everything running. Fuel is required during the production process to grow the food and it’s also essential for transporting it. As a result, when fuel prices rise substantially, food prices follow. Meanwhile, inflation in other industries – such as packaging and animal feed – has increased food inflation too. If you’re struggling to pay for your groceries, then you could benefit from a Morrison’s teachers’ discount to lower the cost of your weekly shop.
To add to the problems of inflation, labour shortages have made it more difficult to get food onto the shelves in the right quantities. With less food available, prices have risen. This has occurred due to restrictions imposed by Brexit and Covid, that has led to a lack of workers available for labour in food production.
Global food prices affecting the UK
The UK is being impacted by food shortages across the world too. Droughts in Russia, North America and Argentina have seen a spike in food prices that have impacted the global supply chain. With less food available in these regions, the cost of importing goods such as wheat has risen for the UK. This is another major factor that has seen the cost of your weekly shop rise significantly.
Inflation has hit your supermarket shelves hard. And it’s been caused by food and fuel shortages across the globe. It’ll be a difficult time to navigate for many, but by setting yourself a clear budget you should be prepared to manage.