Warning of ‘substantial, food price hikes this year as bills go up next month

Food prices could be set to soar this year, with experts warning of ‘substantial’ hikes that could hit households hard.

Next month, bills are set to go up with the Office for National Statistics (ONS) announcing that the Consumer Prices Index (CPI) rate of inflation for February 2021 was 0.7%.

The rising cost of food is expected to be the main driver of inflation over the course of this year, with the ONS revealing that food and non-alcoholic beverage prices rose by 1.9% in February.

Food inflation has been on the rise since last summer, with the ONS noting that food prices had increased by 4.2% in the 12 months to February 2021.

This is in stark contrast to the 1.6% fall in food prices in the 12 months to February 2020, suggesting that households could be in for a tough financial year as prices continue to rise.

The news has sparked concern among experts, who fear that the rising cost of food could hit households hard, given the already precarious financial situation many people find themselves in as a result of the coronavirus pandemic.

Dean Turner, economist at UBS Wealth Management, warned that inflation could be “substantial” this year and that people could be in for a “shock” when the price hikes start to hit.

He said: “We expect inflation to be the big economic story of 2021…Given the extraordinary rises in commodity prices and the supply-chain disruptions that are now beginning to emerge, the potential for a shock when the inflation figures are released later this year is real.”

The ONS also revealed that the cost of clothes and footwear had risen by 1.3%, while the prices of transport, recreation and culture rose by 0.2%.

It is yet to be seen just how much prices will rise this year, but with inflation on the rise, experts are warning that households should prepare for a rise in the cost of living.