Food Manufacturers See Drop in Production Costs, but Food Prices Remain High

The Lloyds Bank report found that British food manufacturers reported a drop in production costs in May 2022, the first such drop since 2016.

The drop was due to lower commodity and energy prices and cheaper shipping, despite a rise in wage bills.

Food price inflation hit its highest level in April 2022 at 19.1%, and while it eased slightly in May, food prices are still rising.

Supermarket chains, including Tesco, have started cutting prices on some food items.

The Bank of England Governor noted that food prices had been slower to come down than initially predicted, contributing to higher-than-expected overall inflation.

The Lloyds Bank report is based on an analysis of S&P Purchasing Managers' Index data covering around 1,300 companies.