UK food inflation falls in May, raising hopes prices may have peaked

theguardian.com:

Food inflation in the UK fell in May, lifting hopes that the rapid increase in grocery prices may have reached its peak after keeping the broader consumer prices index painfully high so far this year.

After more than a year of sharp increases in the price of food, the British Retail Consortium (BRC) said annual food inflation eased this month from 15.7% to 15.4%, even as the overall rise in shop prices hits a fresh high.

Fresh-food inflation, which has rocketing after spectacular increases in the price of sausages, milk, cheese and eggs, fell from 17.8% to 17.2%.

While the decrease in May was modest, the BRC said it indicated that food-price inflation had peaked and was beginning to come down.

The government is working on plans for a voluntary price cap on essential items such as bread and milk, but the proposal has been criticised by retail groups as ineffectual.

The Bank of England is among several forecasters to raise its estimate for inflation in response to predictions that food prices would remain elevated through the summer and autumn. It now expects inflation at the end of the year to be above 5% rather than the 3% or so it previously forecast.

The BRC chief executive, Helen Dickinson, said weaker retail prices were “largely driven by lower energy and commodity costs starting to filter through to lower prices of some staples”.

Dickinson said the price of butter, milk, fruit and fish had fallen after a recent trend that was accelerated by “fierce competition” among UK supermarkets. This had kept “British food among the cheapest of the large European economies”, she added.

The BRC represents a wide range of UK retailers, including the main supermarket chains.

Dickinson said a rise in the price of chocolate and coffee