Food prices are soaring at fastest rate for 18 months

Retail food price rises are running at 4.7per cent a year, according to the British Retail Consortium.(BRC)

The organisation claims the figures would be far worse if supermarkets were not protecting shoppers from sharp increases in the price of basic commodities.

The 4.7per cent annual rise in the biggest seen in the 18 month period since the BRC has been collecting this data.

However, many shoppers will believe the figure significantly underplays the real price rises they are seeing on shopping basket essentials.

The impact of higher grocery bills, coupled with rising mortgage costs, utility bills and petrol mean disposable incomes are at a 17 year low, according to research by Capital Economics

The Daily Mail Cost of Living Index for April found prices increasing at an alarming rate of 15.5per cent a year - adding £800 a year to a family's annual food bills.

Bread, pasta, rice, dairy products, eggs and meat were showing particularly sharp rises.

The wholesale price of rice, for example, is up by 72per cent in a year while the figure for corn is 29per cent higher.

Separate studies published by the Office of National Statistics(ONS) have revealed that prices paid by manufacturers for food as a raw ingredient is rising at the fastest rate for at least 17 years.

For example, the price paid by manufacturers for British farm output in March - crops, meat and dairy - was up by 33per cent in a year.

The BRC, which compiled the monthly price report with Neilsen, said consumers have been protected from the worst effect of these commodity price hikes.

BRC director general, Stephen Robertson, said: "Retailers are succeeding at protecting customers from the full force of increasing commodity, energy and transport costs by absorbing most of those increases themselves, even when it's at the expense of their own margins.

"There is no doubt food prices would be much higher if it wasn't for retailers' efforts to contain them."

Spirits and liqueurs were hit with one of the biggest price increases, up 7per cent on a year ago, largely due to the alcohol duty rises introduced in the Budget.

The BRC said many non-food stores are cutting prices, so offering some relief to hard-pressed shoppers.

It said non-food store prices are down by 0.6per cent in a year, putting the BRC measures of shop price inflation at 1.2per cent, which is less than half the Government's official inflation rate of 2.5per cent.

The BRC said the price of electrical goods, such as flat-screen TVs, is down by 5per cent on a year ago.

Chief UK economist at Global Insight, Howard Archer, said: "Higher food prices are obviously a concern for the Bank of England, but it should be relatively pleased to see that non-food prices fell at an increased rate of 0.6per cent year-on-year in April.

"This suggests that retailers are becoming less confident in their pricing power as the pressures on consumers mount.

"Going forward, we expect muted consumer spending to significantly dilute retailers' pricing power and facilitate further interest rate cuts."