, but the prices of many other foodstuffs have been falling for some time. Indeed, the food cost index compiled by the United Nations Food and Agriculture Organisation, which was posting monthly rises of as much as 40pc in the middle of last year, is expected to post its first annual drop for over two years in November. Yet this is all going to take a while to filter down to the prices of goods that shoppers put into their supermarket baskets and trolleys. And that may be especially true in the UK, where the farming industry has been particularly hard hit by rising fertiliser costs, avian flu controls and a shortage of available workers. At his company's results last week, George Weston, the chief executive of Associated British Foods, estimated that the UK is only about halfway through the process of absorbing higher food prices. That's a pretty sobering thought given that milk, cheese, and eggs inflation was 27.3pc in October alone. Which brings us to the final piece of the puzzle. Capital Economics points out that core goods inflation dipped from 7pc in September to 6.7pc in October, which suggests prices rises caused by global factors are easing. However, the further rise in services inflation from 6.1pc to 6.3pc, a new 30-year high, suggests that 'domestic price pressures are still building'. Paul Dales, the chief UK economist at Capital Economics, says: 'Due to the tight labour market and the high price/wage expectations of households and businesses, we think it will be at least a few months before UK core inflation replicates the easing in US core inflation that excited the markets so much){kind=link}
Britain still faces a long, hard slog to get back to target levels of inflation
Ouch.
That should certainly concentrate a few minds.
Fresh data coming out just ahead of the Autumn Statement shows that inflation is rising far faster than expected and hit a staggering 11.1pc last month, the highest rate for four decades.
A few days ago, figures from the US had raised the hope that global price rises might have peaked. Annual inflation in the US slowed to 7.7pc in October compared to 8.2pc in September – the weakest rate since February. US equities shot up like fireworks in relief and enjoyed their best day for over two years.