London Daily

Focus on the big picture.
Friday, Aug 22, 2025

Milk prices up 38% and sugar 42% amid fear of new rate rise

Milk prices up 38% and sugar 42% amid fear of new rate rise

We’re still on track, says Hunt despite surge in food prices
Food prices have sky-rocketed by a shocking 19 per cent, official figures revealed on Wednesday as warnings grew that more mortgage bill increases will further deepen the cost-of-living crisis.

Sugar was up 42 per cent, milk 38 per cent, olive oil 49 per cent, cheese 34 per cent and eggs 32 per cent in March, compared with a year earlier, fuelling the sharpest jump in food prices since August 1977.

Overall inflation stayed stuck in double figures, dashing hopes of an early end to the crisis.

The consumer prices index stood at 10.1 per cent last month — down from 10.4 per cent in February — the seventh month on the trot it has been in double digits, and defying City expectations that it would dip into single figures.

Economists swiftly warned that the Bank of England’s Monetary Policy Committee could be forced to hike interest rates from 4.25 per cent to 4.5 per cent in May, and possibly even higher later this year, to ensure inflation is being brought properly under control.

These increases will feed through into higher mortgage bills for millions of homeowners, and also drive up rents.

Inflation is still expected to fall sharply in the summer after energy costs dropped compared with their stratospheric peaks.

While this means that overall prices will not be rising so fast, it does not herald a fall in the cost of so many daily necessities, which are stretching the budgets of many households.

Experts still expect Rishi Sunak to meet his pledge to halve inflation by the end of the year.

But the UK’s rate of inflation is the third highest in the G20 group of leading economies, behind only Argentina and Turkey. Inflation in the US fell to five per cent last month while across the EU, price rises average 6.9 per cent.

After the latest prices data dropped at 7am, Chancellor Jeremy Hunt said: “These figures reaffirm exactly why we must continue with our efforts to drive down inflation so we can ease pressure on families and businesses.

“We are on track to do this — with the OBR forecasting we will halve inflation this year — and we’ll continue supporting people with cost-of-living support worth an average of £3,300 per household over this year and last, funded through windfall taxes on energy profits.”

But shadow chancellor Rachel Reeves said: “The question for families remains as real as ever — when will they feel better off under this Conservative government?

“And why, when the cost of living continues to bite, is the Government refusing to freeze council tax this year, paid for by a proper windfall tax on oil and gas giants?”

Karen Betts, chief executive of the Food and Drink Federation, said: “Food and drink price inflation remains stubbornly high because it takes some months for the rising prices that manufacturers pay to produce food and drink to filter through into the prices that shoppers pay on high streets and in supermarkets. And, while we have seen some ingredient and production costs start to come down from the exceptional peaks of recent months, those declines have not been consistent across the board.

“Meanwhile, many of the underlying drivers of inflation are still in play — with, for example, energy costs still double what they were in 2019 and rising labour costs.”

The high food inflation was partly offset by lower fuel costs, with petrol and diesel down 5.9 per cent against the same month last year after prices had spiked following Russia’s invasion of Ukraine.

In the City, traders are concerned that interest rates will have to go up at least twice more for the Bank of England to have any chance of bringing the CPI back down to its two per cent target.

“The smaller-than-expected fall in CPI inflation in March and the stubbornness of core inflation, which stayed at 6.2 per cent, suggests that the Bank of England will raise interest rates from 4.25 per cent to 4.50 per cent at May meeting,” said Paul Dales, chief UK economist at Capital Economics.

“The risk of that not being the last hike is growing.”

Ed Monk, associate director for personal investing at Fidelity International, said: “It’s now clear the UK has an inflation problem that is worse and more persistent than in Europe and the US.”
Newsletter

Related Articles

0:00
0:00
Close
After 200,000 Orders in 2 Minutes: Xiaomi Accelerates Marketing in Europe
Ukraine Declares De Facto War on Hungary and Slovakia with Terror Drone Strikes on Their Gas Lifeline
Animated K-pop Musical ‘KPop Demon Hunters’ Becomes Netflix’s Most-Watched Original Animated Film
New York Appeals Court Voids Nearly $500 Million Civil Fraud Penalty Against Trump While Upholding Fraud Liability
Elon Musk tweeted, “Europe is dying”
Far-Right Activist Convicted of Incitement Changes Gender and Demands: "Send Me to a Women’s Prison" | The Storm in Germany
Hungary Criticizes Ukraine: "Violating Our Sovereignty"
Will this be the first country to return to negative interest rates?
Child-free hotels spark controversy
North Korea is where this 95-year-old wants to die. South Korea won’t let him go. Is this our ally or a human rights enemy?
Hong Kong Launches Regulatory Regime and Trials for HKD-Backed Stablecoins
China rehearses September 3 Victory Day parade as imagery points to ‘loyal wingman’ FH-97 family presence
Trump Called Viktor Orbán: "Why Are You Using the Veto"
Horror in the Skies: Plane Engine Exploded, Passengers Sent Farewell Messages
MSNBC Rebrands as MS NOW Amid Comcast’s Cable Spin-Off
AI in Policing: Draft One Helps Speed Up Reports but Raises Legal and Ethical Concerns
Shame in Norway: Crown Princess’s Son Accused of Four Rapes
Apple Begins Simultaneous iPhone 17 Production in India and China
A Robot to Give Birth: The Chinese Announcement That Shakes the World
Finnish MP Dies by Suicide in Parliament Building
Outrage in the Tennis World After Jannik Sinner’s Withdrawal Storm
William and Kate Are Moving House – and the New Neighbors Were Evicted
Class Action Lawsuit Against Volkswagen: Steering Wheel Switches Cause Accidents
Taylor Swift on the Way to the Super Bowl? All the Clues Stirring Up Fans
Dogfights in the Skies: Airbus on Track to Overtake Boeing and Claim Aviation Supremacy
Tim Cook Promises an AI Revolution at Apple: "One of the Most Significant Technologies of Our Generation"
Apple Expands Social Media Presence in China With RedNote Account Ahead of iPhone 17 Launch
Are AI Data Centres the Infrastructure of the Future or the Next Crisis?
Cambridge Dictionary Adds 'Skibidi,' 'Delulu,' and 'Tradwife' Amid Surge of Online Slang
Bill Barr Testifies No Evidence Implicated Trump in Epstein Case; DOJ Set to Release Records
Zelenskyy Returns to White House Flanked by European Allies as Trump Pressures Land-Swap Deal with Putin
The CEO Who Replaced 80% of Employees for the AI Revolution: "I Would Do It Again"
Emails Worth Billions: How Airlines Generate Huge Profits
Character.ai Bets on Future of AI Companionship
China Ramps Up Tax Crackdown on Overseas Investments
Japanese Office Furniture Maker Expands into Bomb Shelter Market
Intel Shares Surge on Possible U.S. Government Investment
Hurricane Erin Threatens U.S. East Coast with Dangerous Surf
EU Blocks Trade Statement Over Digital Rule Dispute
EU Sends Record Aid as Spain Battles Wildfires
JPMorgan Plans New Canary Wharf Tower
Zelenskyy and his allies say they will press Trump on security guarantees
Beijing is moving into gold and other assets, diversifying away from the dollar
Escalating Clashes in Serbia as Anti-Government Protests Spread Nationwide
The Drought in Britain and the Strange Request from the Government to Delete Old Emails
Category 5 Hurricane in the Caribbean: 'Catastrophic Storm' with Winds of 255 km/h
"No, Thanks": The Mathematical Genius Who Turned Down 1.5 Billion Dollars from Zuckerberg
The surprising hero, the ugly incident, and the criticism despite victory: "Liverpool’s defense exposed in full"
Digital Humans Move Beyond Sci-Fi: From Virtual DJs to AI Customer Agents
YouTube will start using AI to guess your age. If it’s wrong, you’ll have to prove it
×