The latest data from the Office for National Statistics (ONS) reveals that the annual rate of inflation in July 2024 stood at 1.5%, marking a significant decrease from the previous year’s figure of 14.9%. This represents the joint lowest annual rate since October 2021, when inflation was at 1.3%. The downward trend in inflation is a welcome relief after the peak of 19.2% in March 2023.
Interestingly, this is the first time since March 2023 that the annual rate of inflation 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 deflation in July. Additionally, inflation was below 5.0% for 17 categories, indicating a varied impact 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, olive oil, cocoa and powdered chocolate, and lamb and goat witnessed significant spikes in prices at 37.5%, 19.6%, and 12.3% respectively. Alcohol prices also saw a decrease 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 despite 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 improvement in the industry.
Dhoot emphasized the importance of continued investment in the food and drink sector to enhance resilience, address climate change, and promote job creation and economic growth. He noted that around 85% of food manufacturers expect to maintain or increase investment levels in the coming year, signaling confidence in the industry’s trajectory.
In other news, speculation is rife about a potential acquisition deal between Mars and Kellanova, hinting at possible developments in the food industry. As the sector navigates through fluctuating prices and market dynamics, strategic partnerships and investments play a crucial role in shaping its future trajectory.