The latest data from the Office for National Statistics (ONS) reveals that the annual inflation rate for July 2024 stands at 1.5%, marking a significant decrease from the previous year’s rate of 14.9%. This figure is the joint lowest annual rate since October 2021, when it was also 1.3%. The decline in inflation comes after a peak of 19.2% in March 2023, indicating a welcome relief for consumers and businesses alike.
Interestingly, this is the first time since March 2023 that the annual inflation rate has not eased, breaking a streak of 15 consecutive months of slowing prices. The mixed picture for individual categories is evident, with 20 out of the 49 categories reported by the ONS experiencing deflationary trends in July. Additionally, inflation remained below 5.0% for 17 categories, showcasing a varied landscape of price movements across different sectors.
Among the notable changes in prices, frozen seafood saw the fastest drop at 8.1%, followed closely by jams and marmalades at 5.4%. On the other hand, certain products experienced significant price spikes, with olive oil, cocoa and powdered chocolate, and lamb and goat witnessing increases of 37.5%, 19.6%, and 12.3% respectively. The fluctuating prices reflect the complex dynamics of supply and demand in the market.
In the realm of alcohol, prices decreased from 7% in July 2023 to 5.3% in July 2024, remaining relatively stable between June and July of the same year. Balwinder Dhoot, director for sustainability and growth at The Food and Drink Federation (FDF), expressed optimism about the future outlook despite lingering challenges in energy and global commodity prices.
Dhoot highlighted that energy prices were lower in July 2024 compared to the previous year and significantly lower than their peak in the first quarter of 2023. While gas and electricity prices remain elevated, there are positive signs of recovery in the food industry. Around 85% of food manufacturers anticipate maintaining or increasing investment levels in the coming year, signaling a renewed sense of confidence in the sector’s growth potential.
The food and drink industry plays a crucial role in supporting local communities, driving economic growth, and ensuring food security. Continued investment is essential to enhance resilience, address climate change, promote health equity, and create job opportunities. Dhoot emphasized the importance of sustained efforts to strengthen the industry’s capacity to navigate challenges and capitalize on opportunities for sustainable growth.
In other news, rumors are circulating about a potential acquisition deal between Mars and Kellanova, hinting at potential developments in the food industry landscape. As the sector continues to evolve and adapt to changing market conditions, stakeholders are closely monitoring these developments for potential implications on market dynamics and competition.