Sliced white bread

Source: Getty Images

The price of sliced bread fell in November

Top story

Food price inflation has fallen for the eighth month in a row, helping the UK headline rate to slow by more than expected, according to official data this morning.

The consumer prices index rose by 3.9% in the year to November, compared with 4.6% in the prior month, the Office for National Statistics reported

It’s the lowest since September 2021 and much lower than economist expectations of 4.4%.

ONS chief economist Grant Fitzner said: “Inflation eased again to its lowest annual rate for over two years, but prices remain substantially above what they were before the invasion of Ukraine.”

He added the biggest driver for this month’s fall was a decrease in fuel prices and food prices rising much more slowly than a year ago.

Food and non-alcoholic beverage prices rose 0.3% between October and November 2023, compared with 1.1% a year ago.

The annual rate of 9.2% for November represents the eighth consecutive month of easing food inflation. It compares with the recent high of 19.2% in March 2023, the highest annual rate seen for more than 45 years.

The November 2023 rate is the lowest in food and drink since May 2022.

Prices fell in bread and cereals, down by 0.8% on the month from a rise of 1.9% a year ago.

The ONS said prices of a variety of bread products, including white and wholemeal sliced loaves, and packs of cakes all fell between October and November this year but rose a year ago. The resulting annual rate for bread and cereals in October 2023 was 9.2%, the lowest observed since April 2022.

Other smaller downward contributions to the change in the rate came from meat, milk, cheese and eggs, and soft drinks.

However, alcohol and tobacco inflation was up 10.2% in the year to November, down from 11%.

Balwinder Dhoot, director of sustainability and growth at the Food and Drink Federation, said the industry was “very conscious” of the pressure on household budgets at Christmas time and food and drink manufacturers continued to do all they could to keep prices as low as possible for consumers.

“While agricultural commodity prices are generally falling, they remain 21% higher than they were pre-pandemic. There have been significant price rises in cocoa – reaching a 25-year high, while olive oil prices are almost double than a year ago. The recent navigation turmoil in the Red Sea will likely add to inflationary pressures on our sector, with global shipping rates increasing by 10% since the start of the month.

“We are seeing a concerning drop in investment in our industry, in the first half of this year investment was more than a third lower than in the same period four years ago. For the industry to recover its resilience after the shocks of recent years, we need the government urgently to review the conditions for investment in our sector. Improving existing and planned regulation that is adding avoidable costs to the industry would also help, from Extended Producer Responsibility, the Plastics Packaging Tax and ‘Not for EU’ labelling.”

Morning update

Grocery tech firm Eagle Eye has won a five-year contract with a “large” pet retailer in the US.

The customer operates more than 1,000 locations across North America and online and is launching an updated version of its existing loyalty programme, expected to go live in the first half of 2024.

It is Eagle Eye’s seventh customer in North America, which the company said reflected the growing recognition within the region of the importance of personalised digital loyalty programmes.

CEO Tim Mason added: “We are excited to be supporting the customer in their re-imagined loyalty programme to increase customer engagement and retain loyalty through personalisation. This contract is another demonstration of our expanding international profile, the value of our offering and its appeal for large retailers across multiple retail sectors and geographies.”

Chill Brands Group has announced that an agreement to sell its Chill Zero nicotine-free vapour products into a top five UK supermarket.

The business received a “substantial” initial purchase order and secured a listing of its Chill Zero products in 1,500 of the supermarket chain’s UK stores.

CEO Callum Sommerton said: “This milestone not only signifies a major leap forward for Chill Brands in terms of revenues, but also serves as a resounding validation of our product’s appeal and the strength of our brand.

“These retail locations offer a high-visibility platform for our products, enhancing their sales potential while improving recognition of the Chill brand.”

The FTSE 100 rose sharply this morning thanks to the inflation announcement, with the blue-chip index up 1.3% to 7,738.87pts.

Risers in food and drink included Science in Sport, up 3.9% to 12p, C&C Group, up 2.5% to 147.2p, and Marks & Spencer, up 2.5% to 271.1p.

DS Smith and Wynnstay Group were among the fallers, down 2.2% to 304.1p and 0.3% to 361.6p respectively.

Yesterday in the City

The FTSE 100 closed 0.3% higher at 7,635.12pts.

In a quiet day, risers in fmcg included Nichols, Ocado and PayPoint, up 5.3% to 1,148.1p, 4.6% to 761.8p and 3.6% to 498.5p respectively.