Britain suffers highest food and energy inflation in EU as crippling squeeze on households continues

• OECD said food in April was 4.6% dearer than same month last year
• Inflation above the Bank of England's 2% target since late 2009

Food and energy prices are rising faster in Britain than anywhere else in Europe as the crippling squeeze on household finances continues, a major report said yesterday.
The Organisation for Economic Co-operation and Development said food prices in April were 4.6 per cent higher than in the same month last year, while energy prices were up 2.2 per cent.
The rate of inflation in the UK was far higher than elsewhere in Europe and underlined the crisis facing families as they struggle to make ends meet.

Food prices in April were 4.6 per cent higher than in the same month last year, according to the Organisation for Economic Co-operation and Development

Inflation has been above the Bank of England's 2 per cent target since late 2009 as the cost of everyday essentials such as food soars.
Household energy bills have also risen sharply in recent years – eating into household budgets at a time when wages are growing only very slowly, if at all.
The increasing cost of living threatens to undermine the fragile economic recovery as consumers find themselves with less to spend each month. It also puts Britain at a disadvantage to the rest of Europe and the United States.

The OECD said food prices were up 3.7 per cent in Germany in April, 1.6 per cent in France and just 1 per cent in the United States. The report from the Paris-based think tank said energy prices in Britain were rising at more than four times the rate seen in Germany.
In nearly a dozen European countries energy bills fell in April – including in France, Belgium, Denmark and Spain. The OECD said the overall rate of inflation in Britain slowed from 2.8 per cent in March to 2.4 per cent in April.
But this was still well above the 1.2 per cent seen in Germany, 1.1 per cent in Italy and 0.7 per cent in France and the Bank of England expects inflation in Britain to rise again in the coming months. The report came just a day after the Institute for Fiscal Studies, Britain's leading economic forecaster, said the average family with two children will be £1,800 worse off by 2015 than they were in 2008.

Inflation has been above the Bank of England's 2 per cent target since late 2009 as the cost of everyday essentials such as food soars

While overall shop prices fell across the country in May, as retailers slashed prices in 'desperation sales', food prices continued to outpace increases in pay with a rise of 2.4 per cent, according to the British Retail Consortium (BRC).
It said shop price inflation in May was -0.1 per cent – the first time there has been an annual fall in three-and-a-half years, but this was driven by non-essential items. The biggest falls were seen among fashion and shoe stores, where average prices were down by some 5.7 per cent. That means a coat that was reduced from £250 to £150 in a sale in 2012, would have been cut from £250 to around £140 in May this year.
The study said the average price of electrical goods was down by 5.2 per cent in May against a year ago, largely because many tablets, TVs and other devices have come down in price amid fierce competition, particularly from online retailers. There were also price falls for furniture, carpets, DIY and gardening products.
Helen Dickinson, the director general of the BRC, said: 'Times remain tough, but it seems retailers are reading the market well and doing what they can to offer customers the best possible value on their shopping.'
Howard Archer, economist at researchers IHS Global Insight, said consumer spending over the coming months will be 'crucial to the economy's performance'. He added: 'Inflation is still likely to rise to around 3 per cent during the summer despite dipping to 2.4 per cent in April from 2.8 per cent in March.'