Increase will hit households harder as food accounts for a greater share of household consumption than energy
·Trending News Reporter
Fri, 19 May 2023 at 5:43 pm BST
The food crisis will start having a more significant impact on millions of households than energy bills by this summer, experts have warned, amid fears that more poorer families will skip meals to make ends meet.
Statistics released by the Resolution Foundation show the increase in the average food bill is set to overtake the increase in the average energy bill in June.
While households have seen food prices rise even as they tackle record-high energy bills, the predicted further increase will hit households harder, the think-tank said, because food accounts for a greater share of household consumption than energy.
“These price rises will hit low-income households particularly hard, as these families spend a greater share of their consumption on energy and food than those on higher incomes,” the Resolution Foundation said on Friday.
“Taken together, high food and energy inflation means low-income households are experiencing effective inflation rates more than 3ppts higher than high-income households.
“We also know that poorer households buying the cheapest food are less able to change what they buy to save money. Instead, they cut down on eating.”
It said around one in five people reported eating less or skipping meals, with people on the lowest incomes, people receiving benefits, and larger families most likely to do so.
The combination of food price hikes and high energy bills was described as a “toxic” situation for families struggling to make ends meet, with poorer families unable to switch to cheaper brands to cope with the price hikes as others do – because they’re already using those brands.
The result, according to data from the Office of National Statistics, is that 61% of the poorest fifth of households say they cut back on essentials compared with 35% of the richest fifth of households.
Last week the Bank of England warned that inflation measured by the consumer price index (CPI) would not fall as quickly as expected, raising the inflation forecast for the end of 2023 from 3.25% to more than 5%.
The UK government has been urged to take action as the cost of some items doubles, with the cost of food in April showing meat up 15%, fish up 16.5%, yoghurts up 21.8%, and veg up 15.3%, according to Which?
Rishi Sunak met with supermarket bosses this week for crisis talks, but one trade boss who attended the summit dismissed it as an “empty meeting”.
“Everyone realises food prices are rising, but it’s less clear that the scale of the increase has been fully understood in Westminster,” the Resolution Foundation’s report said. “This summer the food price shock to family finances is on course to overtake that from energy bills. The cost of living crisis isn’t ending, it’s just entering a new phase.”