Food inflation is falling, but bills are still a lot more than a year ago
1st August 2023 09:29
by Myron Jobson from interactive investor
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interactive investor comments on the latest BRC Shop Price Index.
Commenting, Myron Jobson, Senior Personal Finance Analyst, interactive investor, says: “Britons have been force-fed a diet of higher costs for basic necessities for a prolonged period. The fact that we’re seeing some easing in food inflation is really important for shoppers.
“When the cost of food decreases, it allows shoppers to save more money on their grocery bills. As a result, individuals may find themselves with more disposable income, which can be used for savings, investments, or other financial goals.
“A fall in food inflation may also contribute to overall economic stability as the Bank of England often consider food inflation as part of their decision-making process when it comes to interest rates and monetary policy. Waning food inflation can help curb overall inflation, which is essential for maintaining a healthy economy.
“Despite the relief in food price growth, costs are still much higher than they were before the pandemic. They remain uncomfortably high for many, especially for those on a low income who spend a greater share of their money on food. More broadly, shop prices are taking a bigger slice of household budgets, rising by 7.6% year-on-year in July.
“While a decrease in food inflation can bring temporary relief to grocery budgets, it doesn't guarantee complete financial security. Food is just one part of overall expenses. Other essential expenses like rent/mortgage, utilities continue to have a telling impact on personal finances.
“Being cautious and maintaining a comprehensive approach to personal finance is vital for long-term financial well-being.”
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