UK households are facing a stark warning over their weekly shop as the price of whole milk skyrockets, despite a welcome fall in the overall inflation rate.
Inflation Falls But Food Bills Bite
The Office for National Statistics has reported that annual inflation cooled to 3.6% in October, down from a peak of 3.8% in the previous three months. This drop eases some pressure on family finances and offers a positive backdrop for Chancellor Rachel Reeves ahead of her crucial budget statement on 26 November.
However, this headline figure masks severe price hikes for essential food items. While the cost of gas, electricity, and some groceries like butter and tea has eased, the dairy aisle tells a different story.
Supermarket Shelves Show Sharp Price Rises
Shoppers are being hit hardest at the checkout for everyday staples. The most dramatic increase is for whole milk, which has seen an eye-watering inflation rate of 15%.
This dairy shock is part of a broader trend of rising food costs. Other items seeing significant price jumps include:
- Coffee, up 14.2%
- Margarine, up 8%
- Ice cream, up a staggering 7.6%
- Mineral water, up 5.3%
- Cleaning equipment, up 4%
More modest, but still notable, increases of around two per cent were recorded for bread, yoghurt, and potatoes.
Budget Hopes and Economic Outlook
Chancellor Rachel Reeves has responded to the data, stating, "This fall in inflation is good news for households and businesses across the country, but I’m determined to do more to bring prices down." She has vowed to use the upcoming budget to deliver on priorities to cut the cost of living.
Financial markets are watching closely. Matthew Ryan, head of market strategy at Ebury, commented that the inflation report supports predictions of an interest rate cut by the Bank of England in December, which is currently around 80% priced in by swap markets.
He also noted that the next week is "extraordinarily important for sterling", with the budget announcement and key economic data releases likely to influence the UK currency's trajectory for months to come.
