Increase in inflation rate in Britain will result in price increases in Irish market

DUBLIN: Prices in supermarkets are rising more rapidly as inflation in Britain exceeds 10%. Inflation in the UK has reached 11.6% in the last few weeks.

Even as prices rose in Britain, the threat of further increases in grocery and food prices began to affect people’s lives in Ireland, which is heavily reliant on the UK.

Food price inflation in Britain hit its highest level since 2008 at 11.6% in the past four weeks. That means a family there would pay £533 (€633) a year on groceries.

Fraser McKevitt, the head of retail and consumer insight at Kantar, said: “As predicted, we’ve now hit a new peak in grocery price inflation, with products like butter, milk and poultry in particular seeing some of the biggest jumps.”

Many retailers in Ireland have already hiked food and grocery price, as British products are mainly imported to Ireland. Figures indicate that as the market runs out of reserve stock, inflation could reach 20% or higher.

Supermarkets in Ireland import large quantities of groceries from British suppliers and manufacturers such as Unilever.

However, how well the euro trades against sterling may also have an impact on prices here, as a stronger euro may offset some of the increase in grocery imports from Britain. The euro has traded between 85.5 pence and 84.5 pence against sterling in recent weeks.

It is said that there could also be a shortage of food items in the markets as consumers become more ‘cautious’ in the wake of rising prices. Sales of the British supermarket’s own-label products rose nearly 20% in August, according to Kantar.

Lidl, Aldi and Tesco are likely to raise prices again in the coming weeks.