The latest data from the ONS reveals that annual “all items” inflation increased again in September 2022. Food and drink inflation also continued to accelerate.
ONS has released its latest findings covering September 2022. This shows that year-on-year inflation has increased slightly, recording 10.1% on the CPI index (compared to 9.9% last month) and 8.8% on the CPIH index (versus 8.6% in July.)
The 0.2% increase in the CPI measure is principally due to rising food prices.
As shown in Figure 1, price change in “food and drink” strengthened again in September, up 1.5 percentage points to 14.6% year on year. Change is accelerating, rather than slowing, suggesting food price inflation still has some way to run.
Food price inflation of 14.6% is within IGD’s forecasts for food price inflation at this point of the year.
Click chart to enlarge
Inflation is being largely driven by supply-side factors, especially energy prices. These continue to erode food production margins, as illustrated in the chart below.
Input prices for food producers increased again in September, up 0.9%. This arrests the decline seen last month, suggesting that the upward trend is likely to continue.
The gap between input and output prices remains wide, and IGD expects these margin pressures to continue to affect retail price change in the coming months.
Click chart to enlarge
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