Food prices are rising more quickly in Britain than in any other Western European country, according to the Organisation for Economic and Co-operation Development.
Prices rose by 6.3 per cent in the year to January, the OECD said, higher than in every other country in the eurozone apart from Estonia, where prices climbed by 11.4 per cent.
The British Retail Consortium, which bases its figures on surveys of retailers, calculated that food price inflation was a more modest 4.6 per cent in January, adding that it had eased to 4.5 per cent last month.
UBS, the investment bank, warned last week that Britain was most likely out of any European country to see “political agitation” over food prices.
But the consortium argued that supermakets were shielding customers from the biggest rises in commodity prices, with 39 per cent of groceries on promotion or discounted.
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Despite the slight fall in food price inflation, overall shop price inflation rose to 2.7 per cent last month, up from 2.5 per cent in January and hitting the highest level since November 2008, the consortium said.
It signalled that the rise was due in part to shops passing on January’s VAT rise. The tax rate climbed from 17.5 per cent to 20 per cent on January 4.
It added that some retailers had not passed on the full VAT rise, raising fears that prices could continue to climb as shops edge up their prices.
Stephen Robertson, the consortium’s director-general, said: “Non-food inflation would be much higher if the full impact of the VAT rise had been passed on to customers.”
• The number of people finding permanent and temporary work jumped last month, boosting hopes that a rebound in private sector jobs could dampen the blow of public sector cuts. The gauge of permanent job placements rose to the highest level in ten months in February, while the measure of those finding temporary work climbed to a near-four-year high, according to data out today by KPMG and the Recruitment and Employment Confederation.