Prices continue to rise, despite slight drop in inflation

19 April 2023

Rising food prices meant inflation remained in double figures last month, despite widespread hopes it would finally fall below 10%.

According to the Office for National Statistics, inflation did fall, but to 10.1% in the year to March, down from 10.4% in February.

It was widely expected to fall below 10%, but food prices remained high, rising at their fastest rate in 45 years.

Food prices have soared as the war Ukraine has driven up the prices of grains and vegetable oils. Rising transport and packaging costs are also making imports more expensive.

David Bharier, Head of Research at the British Chambers of Commerce, said: “The CPI rate of 10.1% means that prices continue to rise at an alarming rate. Driven largely by housing and food costs, this is on top of an already high growth rate from this time last year.

“More positively, today’s figures show that the Producer Price Index has eased to 7.6% from 12.8%, indicating the peak may have passed for input price growth.

“Our research shows that inflation is still by far and away the top concern for UK SMEs. This has been driven by three years of global lockdowns, supply chain crises, energy shocks and new trade barriers with the EU.

“Small businesses, particularly those in the retail and hospitality sector, have been the least able to absorb cost rises and we see that most have not invested or grown.

“Businesses need to see a reduction in the cost and burden of exporting and importing, particularly with the EU, as well as increased support to deal with the unprecedented energy price shock.”