The cost of UK food rose by a record amount over the 12 months to April, but the inflation crisis may be easing, according to the British Retail Consortium (BRC).

Food inflation stood at 15.7% in the year to April, according to the BRC’s research.

Overall inflation among BRC’s 5,000 members dropped to 8.8% from March’s 8.9% figure, due to discounting in clothing, footwear and furniture.

BRC chief executive, Helen Dickinson, predicted that food prices would follow, reports Reuters.

“We should start to see food prices come down in the coming months as the cut to wholesale prices and other cost pressures filter through,” she said.

Consumer price inflation hit 11.1% last October and has only slowly ebbed, remaining above 10% in March.

No profiteering

Retailers have rejected suggestions that shop prices are too high despite a drop in the cost of wholesale food prices globally, reports the BBC. 

The World Bank has said it expects wholesale prices to drop 8% by the end of this year, but the BRC has said there is a time lag of up to nine months before this benefit is seen in stores.

Optimism grows

The news comes as an Institute of Directors report shows company directors’ confidence increased for the fifth month in a row, reports the Guardian.

The index, which surveys company leaders on issues such as the wider economy and their plans for hiring and investment, rose to -5 in April, up from -13 the previous month.

Confidence returning

According to the Times, other reports confirm this growing business optimism, with an April survey from Lloyd’s Bank showing that confidence reached its highest level since May 2022.

Most businesses (61%) expect to increase their prices in the coming year, and 47% are looking to recruit, marking the fifth consecutive month that anticipated staffing levels have increased.

Barret Kupelian, senior economist at PwC, expects the UK to avoid recession this year and said that prices at the end of next year are expected to be 20% higher than they were at the start of 2021.

“Our analysis suggests the UK has very much passed through the eye of the inflationary storm compared with last year and is showing signs of a return to some sort of normality this year,” he added.