The UK’s love affair with chocolate took a bitter hit in May. Prices skyrocketed by a record-breaking 17.7%, the steepest climb since 2016, according to the Office for National Statistics (ONS). Bad weather in Ghana and Ivory Coast, the world’s cocoa kings, turned harvests into a soggy mess.
Inflation held steady at 3.4%, refusing to budge from its year-long high. Food prices, however, decided to throw a party, rising 4.4%—the highest since February last year. Economists are whispering that businesses might be sneakily passing on April’s National Insurance hikes to shoppers.
Chancellor Rachel Reeves announced those tax increases last October, aiming to rake in £25 billion. The result? Retailers are sweating, and your chocolate bar now costs more than a fancy coffee. Kris Hamer from the British Retail Consortium warned that shops can’t swallow these costs forever.
Jonathan Parkman, a big shot at Marex, pointed fingers at Ghana and Ivory Coast. “These two produce over half the world’s cocoa,” he said, shaking his head at their mismanaged farms and disease-riddled crops. He predicts no chocolate price relief until Santa shows up.
Meanwhile, air fares took a nosedive, dropping 5% from April to May. The ONS chalked it up to Easter’s calendar hop—last year it was March, this year April 20. Travel deals are the only thing keeping inflation from throwing an even bigger tantrum.
Ruth Gregory from Capital Economics raised an eyebrow at the numbers. She thinks those National Insurance bumps are sneaking into your grocery bill. Businesses, it seems, are playing hot potato with their extra costs.
Chocolate’s not just a sweet treat; it’s a budget buster. The Food and Drink Federation noted butter’s even pricier, up 18.2%, but chocolate’s 17.7% surge is stealing the spotlight. Cocoa stockpiles hit rock bottom earlier this year, and wholesale prices are still sky-high.
Small businesses are feeling the crunch. Katie Cross, a Devon baker, told the BBC she’s paying £9,000 more per tonne of chocolate than last year. She’s swapped some chocolate treats for flapjacks to keep her bakery afloat.
John Roberts, boss of AO World, didn’t mince words on BBC’s Today programme. “Taxing businesses and jobs isn’t exactly a recipe for growth,” he grumbled. Retailers are stuck between a rock and a pricey place.
Chancellor Reeves stays chipper, claiming the government’s investing in “Britain’s renewal” to help workers. Shadow Chancellor Mel Stride, however, isn’t buying it. He called the inflation figures “deeply worrying” and blamed Labour’s tax hikes for the mess.
The Bank of England, meanwhile, is sitting tight with interest rates at 4.25%. They’re aiming for a 2% inflation target, but May’s numbers suggest they’re not popping champagne yet. Analysts expect inflation to peak at 3.7% by September before maybe calming down.
X users are buzzing about the chocolate crisis. One fan jokingly declared themselves “doomed” as prices soar. Another mourned their shrinking chocolate stash, blaming the cocoa chaos in West Africa.
Supermarkets tried to soften the blow earlier this year. In March, fierce competition led to price drops on some Easter chocolates, but those deals melted away fast. The British Retail Consortium admitted Easter treats were pricier overall, thanks to global cocoa woes.
Ghana and Ivory Coast’s troubles go beyond bad weather. Droughts, heavy rains, and a nasty fungal disease called black pod have wrecked cocoa crops. Add in some government mismanagement, and you’ve got a recipe for empty shelves and wallets.
Claire Powell, a baker, told British Baker that cocoa powder’s irreplaceable. Some bakers are swapping cocoa butter for cheaper palm oil, but it’s not the same. Chocolate lovers might have to brace for less cocoa in their favorite bars.
The Bank of England’s watching this cocoa catastrophe closely. Rising food prices, especially for staples like meat, are making them nervous. Services inflation dropped from 5.4% to 4.7%, but it’s still too high for comfort.
Households are feeling the pinch. One mum told the BBC her food bill’s nearly doubled in three years. She’s selling old baby clothes just to keep up with grocery costs.
Despite the gloom, there’s a silver lining. Air fares and fuel prices are down, giving wallets a breather. But with chocolate prices climbing faster than a toddler on a sugar rush, indulgence feels more like a luxury.
Retailers are pleading for relief. The British Retail Consortium wants business rate reforms to ease the pressure. Without help, they warn, prices could climb higher than a double-decker bus.
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