High energy costs blamed for food prices

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Rising food prices have been partially attributed to the effects of energy cost increases.

The World Food Programme has said food price increases are rooted in the price of energy, increased demand from developing countries and the growth of biofuels, moneynews.co.uk has reported.

Caroline Hurford said food reserves are at a 25-year low and markets are "extremely volatile", the news provider quoted.

Yesterday, it was revealed that rising food and energy prices had pushed inflation up to a 16-year high of 4.7 per cent in August.

According to the governor of the Bank of England Mervyn King's open letter to the chancellor, world agricultural prices went up by 40 per cent, oil prices have increased by 60 per cent and wholesale gas prices have gone up by 90 per cent over the past year.

In comparison, retail gas and electricity prices have risen by around a quarter over the past 12 months and food prices in the shops have grown by 13 per cent.

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