UK food production costs dropped

For the first time since 2016, UK food production costs dropped: Lloyds

As per a Lloyds Bank report on Tuesday, British food manufacturers announced that there has been a significant drop in the prices of food since May 2016 due to lower commodity and energy prices and cheaper transportation costs offsetting wage bills.

According to the United Nations’ food price index, which showed that they were 21% lower than a year ago, manufacturers’ labor costs were rising twice as fast as the average compared to commodity costs.

“It will still take some time before we see the benefit in terms of shelf prices,” as per the managing director at Lloyds Bank, Annabel Finlay’s statement. “This is, in part, due to the long-term nature of contracts between the manufacturers and retailers, as well as the broader segments of the production chain.”

According to the UK’s Office for National Statistics, food price inflation soared to a record high of 19.1% in April, breaking the previous record set in 1977, and then slightly decreased in May.

Last week, Britain’s biggest supermarket chain, Tesco, announced that food price inflation had reached a record high, and along with others, it stated that they are in the process of reducing the prices of some of the food products.

In a statement released last week, Bank of England Governor Andrew Bailey noted that food costs declined at a slower rate than manufacturers had anticipated, leading to higher-than-planned overall inflation in April, which was roughly 9%.

Based on an analysis of data from over 1,300 companies in the S&P Purchasing Managers’ Index, Lloyds Bank created the report.

- Published By Team Timeswire

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