Food inflation in the UK has hit 18%, according to Ulster Bank’s chief economist Richard Ramsey.
But Ramsey said although there are indications that this headline figure may drop back, this will not bring any relief for consumers.
“Nat West Bank is projecting that the figure will start to fall over the coming months, reaching around 6% by the end of 2024.
“But this doesn’t mean that food prices in the shops will start to fall. Rather, we are looking at a slow down at the rate by which retail food prices will continue to increase, " he warned.
Ramsey this week unveiled his Ulster Fry Index for 2023 at the launch of this year's Balmoral Show event.
The index underlines how basic food prices in Northern Ireland have increased over the past 12 months.
The overall 2023 index figure shows there has been a significant 19.1% jump in the price of all of the components of an Ulster fry .
It highlights that bacon is up 20.1%; pork sausages 19.3%; butter 25.4%; low-fat spreads up my 31.5%; eggs 29.3%; milk 42.9%; tea 15.3%; coffee 7.1%; tomatoes 18.0%; mushrooms 6.7%; and a sliced loaf up by 21.1%.
The Ulster Bank chief economist also pointed to a number of positive factors at play within Northern Ireland’s economy at the present time.
Ramsey said the number of people in jobs is at a record level while the number of people unemployed continues to fall significantly.
In addition, Northern Ireland’s economy, overall, is actually growing – albeit at a very moderate rate he said.
Ramsey has projected that both inflation and interest rates will start to fall over the coming months.
According to the economist a number of key input costs across the economy are starting to fall at the present time.
Chief among these is the price of crude oil.
However, Ramsey did confirm that the year ahead will be one of significant challenge for the Northern Ireland economy and the UK as a whole.
“The difference between 2023 and last year is the fact that we have a good idea of the challenges that are out there and how they will play out.
“Last year was characterised by unforeseen events, including the war in Ukraine,” he said.
Ramsey also referenced the September 2022 budget of the then UK chancellor of exchequer, Kwasi Kwarteng, in the same vein.
“The biggest challenge facing the UK economy right now is that disposable income levels remain at record low levels," he said.
“The fact is that both the economy of Northern Ireland and the rest of the UK are driven by consumer spending levels.”
Ulster Bank's regional managing director, Mark Crimmins, also highlighted at the launch of the Balmoral Show that a number of banks around the world had recently encountered major financial problems.
Crimmins said: “As part of the Nat West group, Ulster Bank retains very high levels of liquidity. And it’s very much a case of business as usual.”
