Britain’s inflation rate has fallen unexpectedly to 2.6% in June, down from 2.9% in May, marking the first drop in nine months, according to the Office for National Statistics.
The cost of living hit a four-year high at 2.9% in May, while pressure on inflation wiped more than a cent off sterling against the dollar and it stood down nearly a cent against the euro at €1.1293.
Reacting to the news, the chief executive of Scottish Federation of Meat Traders Association, Douglas Scott, noted that “any drop in overheads is welcomed by the Scottish retail butchery sector and this is especially important at the time when raw material costs are significantly higher than they were this time last year.”
He added: “Scotch Beef and Lamb producers are enjoying the 10% uplift in prices and Scottish pig producers even greater.”
Head of policy at the Association of Independent Meat Suppliers, Norman Bagley, also told Meat Management: “Inflation is a strange thing as it effects different people in different ways but overall price increases look subdued.
“A bigger effect on the meat industry is the currency which at the moment favours exports and increases prices of imports which is keeping UK livestock prices very buoyant for farmers.”
In addition, policy and market intelligence executive at The International Meat Trade Association, Katrina Walsh, highlighted that the fall in inflation seems to be linked primarily to a drop in price of fuel, but noted that this could be “good news to the industry, in terms of reduced transport costs”.
However, she warned that the pound is “still quite weak against the euro and dollar which will be driving up the cost of imports, for both consumers and for those requiring imported inputs to produce food in Britain”, which could mean “rising prices in shops and restaurants”.
Walsh said: “Meat already represents a significant proportion of many people’s weekly food budget so any increase in price could lead to consumers trading down to cheaper products or moving out of the market altogether.”
Q Guild member Gary Chadwick, who owns Chadwick’s Butcher’s, added: “The fluctuation of price in the markets is always seasonal, for instance lamb and beef steaks are always higher at this time of year; I don't see any real threat from the current inflation figures or benefit. However I would imagine that any real costs to businesses would be fuel costs which are the biggest impact on inflation figures as oil comes out of a depression on price.”
This story was originally published on a previous version of the Meat Management website and so there may be some missing images and formatting issues.
