Steep rise in fresh food inflation

Increasing oil and commodity costs have sent fresh food inflation soaring into double figures, according to a new survey.

Fresh foods were 10.8% dearer in July compared with a year ago, the British Retail Consortium-Neilsen Shop Prices Index showed. The figure rose from 8.4% in June, and has more than trebled over the past 12 months.

The survey found that annual inflation for all food was 9.5% last month, while ambient foods - including tinned and other longer-lasting items - rose by 7.4%.

The cost of oil, which topped $147 (£75) a barrel in July but has since dropped back to below $120 (£61) this month, had a direct impact on costs associated with packaging, storage and distribution, the BRC said. It added that higher costs for pork, margarine, cooking oils and fats also drove up in-store prices.

"Overall food prices are rising but retailers are keeping increases well below the extra supply and operating costs they face," said Stephen Robertson, the BRC's director general. "Falls in the prices of oil and some world food commodities, such as wheat and soya, provide hope but most retail costs remain sharply up on a year ago and are still rising."

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