Inflation nation: why are food prices rising again?

0:02Hi, I'm Charlie Duffield and welcome back to The Standard Podcast. If you're new here, hit follow and give us a rating. For all the latest news, head to standard.co.uk. Coming up later in the show, comedy acts to see at this year's Edinburgh Fringe Festival. But first, the rate of inflation unexpectedly leapt to an 18-month high of 3.6 % in June, with shoppers feeling the pinch. That was up from 3.4 % seen in the previous month, but economists weren't expecting any change. The Office for National Statistics said it was the result of falls in fuel prices bottoming out, higher airfares and rising supermarket prices.

0:53The higher inflation figure follows news last week that the economy shrank unexpectedly in May. At the time, Chancellor Rachel Reeves said she knew people were still struggling with the cost of living, but that the government's plans included putting more money in people's pockets. Joining us now is The Standards' business editor, Jonathan Prynne. Jonathan, so this news today is quite unexpected, isn't it? Well, it was a bit unexpected. The city had been looking for around staying the same at 3.4%. These are figures for June. We had 3.4 % in May. Most forecasters were expecting probably staying the same at 3.4%.

1:33So when 3.6 % came up as the number this morning, there was a bit of an intake of breath. It doesn't sound like a huge change, but it is quite significant. And so what does this mean? What's the impact? It just makes it harder for the Bank of England to cut rates at the pace that they would like to and give a nice boost to economic growth. So interest rates, they'll probably still come down another quarter point in August, but the outlook beyond that may be slower pace of interest rates. Interest rate cuts through the rest of the year. I think the other thing that they will worry about is that there's some real staples that are definitely starting to get more expensive, particularly food and drink, which the rate of increase in food and drink inflation accelerated for the third consecutive month.

2:16And it's not quite clear what's driving that, but there's some suggestion that companies are passing on the extra costs they incurred in last year's budget. from increasing national insurance contributions. That's been passed on to consumers. Also, the very hot weather seems to be having some impact on harvests. And so food prices could be getting pushed up as a result of that. So are there any particular food items which are being hit especially hard? Yes, they provide a very detailed breakdown, actually, the ONS. So you can dive in and get exactly what each category of food is going up by. And some of them are absolutely astonishing actually fresh meat in particular is going up at a very very rapid rate at the moment beef and veal 20 year on year lamb 16 year on year dairy also seems to be affected with butter up 20 year on year now i've read there's some commentary suggesting that because of the dry weather the amount of pasture grass in the fields has been badly hit that's meant farmers have had to get in other sources of feed that's pushed up the price of meat and that has a knock-on effect for dairy, obviously, as well.

3:21The other one that's slightly depressing, chocolate, up 16.3%, obviously not a UK issue, but the cocoa harvest elsewhere in the world, where the great cocoa growing areas of the world, that was bad, apparently. And that seems to have had a knock-on effect for chocolate prices. So if you're a meat eater and a chocoholic, it's not been very good news. And what has the reaction been to this news? I think the worry for some of the economists is that we are stuck in a situation where we just can't quite squeeze inflation out of the system. And our inflation is much higher than European inflation or EU area, Eurozone inflation rather, and higher than American inflation.

4:01We do seem to have a particular issue in the UK. Whether that is the national insurance contributions being passed on or not, it's hard to say, but it's likely to be a factor. And that means that, as I said before, that the rate of decline of interest rates is likely to be slower. The boost to the economy is more drawn out and weaker. The economy continues to grow at a very slow rate. And we're sort of caught in this stagflationary cycle of low growth and relatively high prices. I think there will be concern in particular that the price of food staples are going up so much because that suggests another squeeze on consumers.

4:40Obviously, you can't avoid buying food and drink. That's the last thing the Treasury wants at this stage is for the consumers to pull in their horns again and feel nervous about spending because the high street is absolutely desperately crying out for consumer confidence to return. And it doesn't seem to be there yet. So I think these numbers are a little bit grim, as one commentator said. Is there anything that the government can do in this situation? The government has very little control over prices. They want the economy to grow as quickly as possible. But the actual day-to-day price of daily goods, they have very little impact over, other than, I suppose, where they impose taxes on duties on fuel and other alcohol and cigarettes and so on.

5:25There is a little bit of impact they can have at the margin. What business would say is if you want prices to stay low or price increases to stay low, then don't tax us. Don't load us up with more cost burdens because our only option, if we want to preserve any sort of profit margin, is to pass that on to shoppers in the form of higher prices. So I guess what the government can do is something. It can keep the burden on business as low as possible. There are other areas, business rates, where business is absolutely, again, crying out for reform and the burden being lifted. So the government can help in those ways.

6:02But at the moment, everything's going in the other direction. The government obviously is short of revenue, it needs to raise as much money as it can. It's all fit to put most of the burden on business at the last budget, which is now looking like a bad error of judgment. And of course, Rachel Reeves is also trying to get growth going. We saw all the reforms of financial services yesterday in the mansion house speech, which have been broadly well received by the industry, by the financial services industry. The government, it can't control the wheat harvest if the weather's bad, but I think business would like to see some reduction of the cost burden that does seem to be resulting in prices being passed on to consumers.

6:43Let's go to a break. Coming up in part two, from stand-up legends to award-winning newcomers, stay tuned for a preview of this year's Edinburgh Fringe Festival. We'll see you back here in just a moment.

7:05Welcome back. Now it's 15 days until the largest arts festival in the world, the Edinburgh Fringe Festival, kicks off for another year. For three weeks in August, the city welcomes an explosion of creative energy. These days we are all in need of some comic relief but with literally hundreds of comedy shows to choose from it can be hard to know where on earth to start but luckily the standards comedy critic Bruce Dessau is here to help. So Bruce you're an Edinburgh Fringe Festival veteran aren't you? Tell me how many comedy shows are available for people this year. I feel I've been reviewing comedy all my life because I was going to comedy shows a lot longer you know ever since I was a teenager I was going to comedy shows.

7:50I've been going to Edinburgh for about 20, 25 years now. And it just gets bigger every year. There was one year I went to Edinburgh, actually in 2020, there was only one show on, but I was determined to go to it so that I could never miss a year of the Edinburgh Fringe. And I had one open air show in 2020. But then gradually since then, it's built up, so it's bigger than ever. And in terms of comedy this year, at the last count, there were 1 ,214 comedy shows in Edinburgh. There will probably be more. Those are the shows that have registered with the Edinburgh Fringe, but people do turn up and do other shows.

8:25Trying to whittle it down and decide what to see is quite a challenge. What are the best shows that people should go to? I do say to people, pick up a programme from a venue, just open it at random and stick a pin in, because it's always good just to take a punt. That's how we discover new shows. I was up in Edinburgh about 20 years ago. I had a free hour to spare with not much to do. And I thought, oh, I wonder what's on at the venue near me. And I just popped into a tiny show in an attic room, and it was an unknown comedian called Michael McIntyre. I just knew he had something. I was one of the judges that year, and he got a nomination for Best Newcomer.

9:03And well, Michael McIntyre's never looked back. So it's always worth going and seeing acts that you've never heard of. But in terms of selecting them, everyone goes to Edinburgh. So you've got a choice of big names. People like Bill Bailey, Miriam Margolis are up there. I've picked out some smaller shows that I think are names that are going to be big in the future. One I would mention, Vittorio Angelone. He's an Irish comedian with an Italian background. I saw his Edinburgh show a couple of years ago and I thought, yeah, this guy's going to be big. And you can see him in Edinburgh. And in fact, since I wrote the preview saying he's doing the show in Edinburgh, he's actually announced a tour and he's already announced a date at the Apollo in Hammersmith in London.

9:43So that gives you an idea of the bus about him. But if you can get up to Edinburgh, you'll see him doing a tiny show at the Monkey Barrel venue. It's very funny talking about his roots and how his Irish culture and his Italian culture, the similarities and the contrasts. And he'll also be talking about cancel culture. His show is called You Can't Say Nothing Anymore and it comes highly recommended. And who else would you recommend? Another show I'd recommend, which has become more topical than ever, is the American movie star Rosie O'Donnell. I think she's in her early 60s now. She started out as a stand-up comedian, but this is actually her debut at the Edinburgh Fringe.

10:24And she's doing a run from August 1st to the 10th. She's been in the news recently. And a few years ago, she relocated from America to Ireland because she wasn't happy with the political situation in America. And this week, Donald Trump said that he is considering revoking her US citizenship. And he described Rosie O'Donnell as a threat to humanity in one of his social media posts. So I think she'll be interested. I think that's a show that's going to make headlines. But it also should be a very funny show. Rosie started out as a stand-up comedian. She had a chat show in America, then went on to make movies.

10:58And now she's returning to her stand-up roots. Another person I've picked out who is a newcomer, but is being talked about a lot on the comedy circuit, is Jessie Nixon. She's from Bristol, but she's now recently moved to London. She's making her debut in Edinburgh with a show called Don't Make Me Regret This. Like a number of comedians, when they make their debut, what they tend to do is it's their origin story. they're talking about their life and how they've come to be in this position and she's got an interesting past she was at one point in her life she was homeschooled then she was privately educated somewhere along the way she's acquired a criminal record she'll hopefully be explaining that in the show and she describes the show as it's for anyone who is mentally ill elapsed catholic queer, occasionally distraught, too smart for your own good, or have ever cried in a changing room.

11:51And as I said, that's Jessie Nixon. She's at the Assembly from July the 30th to August the 24th. And I think she could be a contender for the Best Newcomer Awards when they're announced at the end of the month. Do you have any hacks for first-time visitors? The usual recommendation is take every possible sort of bothing you can think of, because it really is like you can get four seasons in a day. So you really need an umbrella, something light, something heavy in case there's a hailstorm. This is going to be an interesting year in Edinburgh because in the first week, there's also a little known rock group called Oasis doing shows in Edinburgh.

12:27If you're an Oasis fan, you could maybe try and get a ticket for their gigs and combine some comedy with some rock music. Eat well, pace yourself. There are literally hundreds of venues. Everything is pretty walkable. Don't panic too much if you've got to get from venue to venue. Most of them are within a five or ten minute walk of each other. But do try and see as much as you possibly can because I can't recommend going to Edinburgh enough. But it's just the atmosphere of the city. There's no place in the world quite like it. When you look either online at edfringe.com or you pick up a brochure, make sure you check out the free shows.

13:00If you're on a budget, they're worth catching. I should give you a warning, though. They say they're free, but quite often there'll be a bucket at the end and they might ask you for a contribution. But as I said, you could still be seeing a star of the future. Finally, what role do you think comedy plays in people's lives? When we had the crash in 2008, I said things are looking a bit bad. Go to a comedy gig and cheer yourself up because of the financial situation. And then I think I said it during Covid, I said watch comedy online because it'll help you get through lockdown. it's a great way to relax enjoy yourself take your mind off things but i also like comedy that makes you think as well i went to see sarah pasco last night in london she's doing jokes about being a being a mother which are really funny to anyone who's got kids very relatable humor but also very clever humor about what it actually is to be a human being addressing the human condition comedy is incredibly important to everyone if you want to know what's going on as i said i write about it in The Standard.

14:00I've also got a website which is called Beyond the Joke. Comedy will make your life better. I think if comedy doesn't make your life better, there must be something seriously wrong with you.

14:13And that's The Standard. For all the latest news, head to standard.co.uk. If you'd like to get in touch, please do drop us a line at podcasts at standard.co.uk. We'll be back here tomorrow at 4pm. We'll see you then.