Annual food prices in the UK went up by 14.7% in October, representing the largest increase since records began in 2008.
Driven largely by the knock-on effects of Russia’s war in Ukraine, food inflation is expected to continue its upward trajectory with energy prices showing no signs of abating. With the gas taps from Russia turned off, European countries are scrambling to secure their energy supplies for the winter, leading to soaring prices which then spill over into other markets. This is in addition to the global shortage of grain, a product largely exported from both Russia and Ukraine.
A report by the research company Kantar estimated that the average yearly food bill for British families could increase by almost £700.
The poorest of households are going to be the worst affected, with food and energy already taking up a large proportion of their weekly spending. It is likely that millions of people across the UK are going to suffer from a a dramatic fall in living standards this winter, with many struggling to keep their homes warm and being forced to skip meals.
THINK LIKE AN ECONOMIST!
Q1. Define the term inflation.
Q2. Explain what type of inflation is being described in the article.
Q3. Analyse the impact that food inflation will have on the living standards of UK citizens.
Extension question for discussion:
What could the UK government do to protect low-income households in the face of soaring food and energy prices?
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