Breakfast Index falls for second time as UK food inflation eases

London: A full English breakfast has become cheaper for the second time since Bloomberg started a monthly index measuring the cost of ingredients a year ago.

The total price of all the components of a fry-up fell by 20 pence (26 US cents) to £35.58 in July. Bloomberg’s Breakfast Index uses product sizes provided by the Office for National Statistics to crunch prices of sausages, bacon, eggs, bread, butter, tomatoes, mushrooms, milk, tea and coffee.

“Many households will find their mornings getting cheaper, with price drops in tea, coffee, milk, breakfast cereals and fruit,” said Helen Dickinson, chief executive officer of the British Retail Consortium.

Still, the cost is well above where it was a year ago, and the total price was lower in May, showing declines can prove temporary and food inflation is sticky in the UK.

Most categories in the index dropped in price from a month earlier, with the exception of sausages, eggs and bacon.

The average price of the ingredients fell by 1.2% from June, compared with a 0.7% increase the month before.

There is broader cause for encouragement for consumers stocking their fridge. The rate of food inflation as measured by the Consumer Prices Index slowed in July to 14.9%, the slowest growth rate since September 2022.

Figures from market research firm Kantar this week also reflected a slowdown, putting grocery inflation at 12.7%.

Supermarkets said they are cutting prices wherever possible in a bid to woo shoppers in Britain’s competitive grocery market. Discounters Aldi and Lidl are gaining market share from their more established rivals as consumers try to save pennies and buy more store-brand goods.

Britain’s antitrust regulator cleared the country’s biggest supermarkets of profiteering from high food costs last month, noting that their operating margins have narrowed since the onset of the cost-of-living crisis.

Still, the Competition and Markets Authority said some retailers did not display prices as clearly as they could, making it hard for shoppers to determine value. — Bloomberg