Inflation finally falls to single figures – but food costs still at record high

INFLATION finally fell to single figures today but food costs are still at a record high.

Pressure is now mounting on food producers to slash prices.

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And in a fresh headache for the Chancellor, government borrowing rates soared.

Jeremy Hunt welcomed the inflation rate sinking from 10.1 per cent last month to 8.7 per cent.

But he said the cost of supermarket staples remained “worryingly high” with prices up a near-record 19.1 per cent.

Sugar is up 47 per cent, cheese by 39 per cent, and eggs and milk 37 per cent.

Mr Hunt, who hauled in food manufacturers this week, said the “battle is far from over”.

Writing in today’s Sun, he warns: “While the latest fall in inflation shows we’re on the right track, there is no room for complacency — especially on food prices, where I know families are feeling the pinch.”

Huge energy and fuel cost rises sparked by Russia’s invasion of Ukraine had been keeping inflation in double digits.

Those rises have now been absorbed, causing the rate fall, but price rises in other sectors remain stubbornly high.

Core inflation, which excludes food, booze and energy, jumped to 6.8 per cent — the highest since 1992.

That spooked the City, with yields on two-year government gilts up 27 points, meaning the Treasury has to pay out much more in interest.

The last time they were that high was during Liz Truss’s ill-fated premiership after her unfunded tax cuts sent the markets into meltdown.

But PM Rishi Sunak said the fall in total inflation showed he was “making progress”.

This post first appeared on thesun.co.uk