Food price inflation in 2014 revised down to 2 per cent

Will Green is news editor of Supply Management
14 August 2014

☛ Want the latest procurement and supply chain news delivered straight to your inbox? Sign up for the Supply Management Daily 

14 August 2014 | Will Green

Food price inflation for 2014 has been revised downwards to 2 per cent.

Prestige Purchasing has changed its original prediction of 3.8 per cent because of a combination of factors including a strong pound, better weather conditions leading to higher yields and more competition in the retail sector.

CEO David Read said: “We have watched with interest a steep decline in the rate of UK food inflation during 2014. This has been caused by a variety of positive factors including the strengthening of sterling, competitive pressure in the retail sector, and more benign climatic conditions leading to much higher yields in areas like cereals and oils.

“These factors have driven food inflation lower than our model predicted, and in the seven months between October last year and this May we saw food inflation fall from around 4 per cent to a position where prices actually fell year-on-year.”

However, the food and beverage purchasing organisation expects inflation to be higher next year and to rise further over the medium and long term.

“The macro factors of population growth and climate change, coupled with demand pressures from increasing GDP growth have led us to expect the rate of food inflation to start to increase again, and in June we have seen the first sign of this,” said Read. “The challenge now is to predict the speed and rate of this increase.”

 

LATEST
JOBS
Swindon, Wiltshire
upto £40K base (+ Paid overtime and corporate benefits)
Honda Manufacturing Ltd
Kew gardens, Richmond upon Thames, London (Greater)
£37,000 - £42,500 per annum pro rata, depending on skills and experience
Kew Royal Botanic Gardens
SEARCH JOBS
CIPS Knowledge
Find out more with CIPS Knowledge:
  • best practice insights
  • guidance
  • tools and templates
GO TO CIPS KNOWLEDGE