UK retailers are increasing food prices at a quicker rate than their suppliers, according to the latest government figures. 

The Producer Price Index, measuring the price of goods as they leave the factory, revealed that food prices have increased 11.4% in the year to August. However, the Consumer Price Index reveals that consumers are paying 12.3% more for groceries.

This has led some to conclude that the supermarkets are using food inflation as a pretext for hiking prices.

The average cost of a loaf of bread has risen to GBP1.24 (US$2.18), up from GBP0.88, in the year to August, while the price of 12 eggs has increased from GBP1.95 to GBP2.58.

However, the British Retail Consortium has defended retailers' price increases.

"The latest figures show shop prices are increasing more quickly than producer prices. Does that mean retailers are taking the opportunity to bump prices up? No," a spokesperson for the industry body told just-food.

"Producer prices are the first step in the supply chain and so they are reacting first to a fall in the cost of raw materials and commodities…. We will see a knock-on effect on shop prices over the next few months. The rate of increase in shop prices is already slowing and that will continue to happen."

Neither Tesco nor Asda, the UK's two largest supermarkets, were available for comment at time of press.