Pressure on family budgets is tightening as grocery price inflation reached 5.2% in March.
The UK’s poorest families will see the amount of spare cash at their disposal drop by a fifth this year with £850 less to spend on non-essentials.
Figures from market analysts Kantar said prices were rising fastest for pet food and savoury snacks, such as crisps, but were still falling for some products such as fresh bacon.
Spare cash is also under pressure from rises in the price of clothing and furnishings with non-food retail price inflation accelerating to 1.5% in March, from 1.3% in February, according to the latest report from the British Retail Consortium (BRC).
Helen Dickinson, chief executive of the BRC, said the full impact of rising costs for retailers and their suppliers was “yet to be seen”.
“There have been mounting cost pressures throughout the supply chain for some time, including rising wages, input costs, global commodity prices, energy, and transport. Many of these costs are beginning to be exacerbated by the situation in Ukraine,” she said.
Price rises are being fuelled by the rising cost of labour and basic commodities such as wheat and cooking oil – as well as energy and packaging driven by a combination of Brexit, resurgence in demand as economies reopen after pandemic lockdowns and the war in Ukraine.
Richard Lim, chief executive of Retail Economics, said: “Rising inflation will see spending power under huge pressure, particularly for the least affluent households who spend a disproportionate amount of their income on non-discretionary items such as food, energy, and fuel.”
For the average family, the cash left after paying for essentials will fall by almost 6.5% or £430 according to Retail Economics.
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