Rising food prices put pressure on UK family expenses
The Bank of England (BoE) is set to convene on Thursday, with analysts predicting that the central bank will hold off on a rate cut due to the looming autumn budget and inflation remaining above their 2% target.
According to recent research by the Office for National Statistics (ONS), food prices have surged, with a 5.1% year-on-year rise in the cost of food and non-alcoholic drinks from August 2025. This surge is attributed to domestic policy decisions, including an increase in the national minimum wage and employers' National Insurance contributions.
Economists warn that a stable downward inflation trend is crucial to unlocking broader activity in the market. However, the average wage grew by 4.7% between May and July 2025, but this growth is not keeping pace with the rising cost of food.
Daniel Austin, CEO and co-founder of ASK Partners, expressed concern about the unchanged UK inflation, predicting a bumpy and uncertain road ahead. He cautioned against a premature rate cut, stating it would be a leap of faith.
For homeowners and buyers, the hope of lower borrowing costs remains, but relief is not imminent due to persistently elevated fixed mortgage rates. Products such as beef, butter, milk, and chocolate have experienced a particularly steep increase in cost.
In related news, businesses have warned these higher costs are being passed on to consumers. Chancellor Rachel Reeves acknowledged the economic struggles faced by families and pledged to bring costs down and provide support ahead of her autumn budget, scheduled for 26th November 2025. Over £1.1 billion has been announced for UK coastal towns and cities.
However, markets expect another rate cut before the end of the year, but the BoE may hold off until there's clarity on the Chancellor's fiscal plans. Policymakers are facing challenges from volatile global conditions and shifting domestic policies.
In a separate development, research shows that tall buildings on narrow streets trap air pollution. This finding underscores the need for sustainable urban planning to combat environmental issues.
Kris Hamer, director of insight at the British Retail Consortium (BRC), stated that many families are struggling with the cost of living due to food inflation outpacing wages. The most recent British government politician to announce support for households to reduce food costs has not been identified in the provided search results.
Investors and developers are watching closely, with resilient sectors like co-living, build-to-rent, and storage continuing to attract capital due to tight supply and strong demand. The persistently high inflation and rising costs are likely to shape the economic landscape in the coming months, with policymakers and businesses working to find solutions to ease the pressure on households.
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