Stockholm Syndrome: The UK's love affair with supermarkets

STOCKHOLM SYNDROME

M&G's head of retail fixed interest Jim Leaviss explores UK consumers' affection for supermarkets in the face of rising food inflation.

Why is UK inflation running at a much higher rate than European inflation? The UK's CPI is 4.5% compared with 2.7% in Europe. One answer might be food inflation, a major portion of the overall CPI baskets (11% in the UK, 15% in the eurozone - add in alcohol and both are a little higher). The chart shows that the UK rate of food inflation is systematically higher than that in Europe. At the moment the year on year increase is 4.7% compared with 2%, and at times the difference has been much higher. There are times when you might explain this through sterling weakness feeding into import...