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Now that utility bills are finally starting to come down, food price inflation is having the biggest impact on the cost of living.
Food prices are nearly 20 percent higher than they were a year ago, and it is the poor who suffer the most, as they tend to spend a higher percentage of their income on food.
Jeremy Hunt wants to bring the price down. He called farmers, food manufacturers and supermarkets to Downing Street for meetings and promised to help competition watchdogs if evidence of wrongdoing was found.
But personally, he knows there is little the government can do. The current high food prices are mainly due to energy and labor costs. The former is driven by global markets, the latter is based on long-term factors that can take years to change.
Food suppliers and retailers have long-term contracts with their suppliers. This explains why food prices did not start to rise significantly until well after energy prices began to rise, but it also means that energy prices will slow down again. increase.
It’s true that retailers’ profit margins are improving. But the food industry is one of the hottest, with Aldi and Lidl vying for price cuts and Tesco, Sainsbury’s and Asda constantly struggling to keep up. It’s hard to see how Mr Hunt could force the Conservatives to offer goods cheaper, without literal price controls that the Conservatives hate.
Then there remains another remedy. It’s about distributing more cash so that individuals can cope with higher prices. This is already happening to some extent, helping millions of low-income families pay for their living, but it’s also an imperfect solution. The more money the Treasury injects into the economy, the higher the demand and the longer inflation stays dangerously high.
The Prime Minister and Prime Minister can only encourage patience. It’s quite possible that groceries will be cheaper by the end of the year. Otherwise the Conservatives will surely be punished at the polling place.
