More misery for consumers

If you think the cost of living is bad now, just wait: much more misery is in store. The ONS has today released (pdf) producer (as opposed to retail) prices showing 9.3% food inflation, the largest since records began in 1986. Import prices for food and drink are 14%, almost all of this due to the collapse in sterling (and no, Prime Minister, the plunging pound has nothing to do with American sub prime crisis). All this will take a while to filter into shops, where food is 6% up on last year now. But sooner or later – perhaps as early as Christmas – double-digit food price inflation will be with Britain again. Add this to the 45,000 expected home repossessions and the economic feel-bad factor has just begun.