Food price inflation in the UK has accelerated to a 17-month high this month, worrying policymakers at the Bank of England and worsening the cost of living pressures on British households.

The latest measure of shop prices from the British Retail Consortium (BRC) and NielsenQ (NIQ) said food price inflation was 4.2 per cent in August year-on-year, up from 4 per cent in July.

The Bank is growing increasingly concerned about renewed inflationary pressures spreading from food prices through to other parts of the economy. According to its estimates, food price inflation could accelerate to exceed 5 per cent later this year.

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The BRC said the biggest increase in prices was for “staple” items such as eggs and butter, while chocolate prices rose after poor cocoa harvests.

Mike Watkins, head of retail and business insight at the market research firm NIQ, said: “The uptick in prices reflects several factors: global supply costs, seasonal food inflation driven by weather conditions, the conclusion of promotional activity linked to recent sporting events and a rise in underlying operational costs.”

By contrast, non-food item prices continued to fall with an annual disinflation rate of 0.8 per cent after a 1 per cent decline in June, the BRC said.

Helen Dickinson, chief executive of the BRC, said higher consumer prices were partly the result of retailers passing on the £7 billion tax rise on the retail sector from last autumn’s budget. The government raised national insurance costs for employers and lifted the national living wage from April this year.

The Bank’s nine-strong monetary policy committee cut interest rates this month to 4 per cent but warned that food price inflation has become a new, unexpected source of inflationary pressure that could mean no further interest rate cuts this year.

Households are traditionally more sensitive to rising grocery bills and policymakers think this risks raising domestic inflation expectations. Higher inflation expectations can in turn push up wage growth and lead to firms raising the prices they charge to consumers.

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Official figures for July from the Office for National Statistics showed food price inflation overshooting the Bank’s estimates at 4.9 per cent, compared with forecasts of 4.7 per cent, due mainly to higher meat and chocolate prices. Analysts at Capital Economics forecast that food price inflation would peak at 5.5 per cent in September.

The most recent survey data suggests that rising inflation has not worsened household inflation expectations, which were stable at 4 per cent on a 12-month measure this month, according to a survey compiled by the US investment bank Citi and the polling firm YouGov. Longer-term inflation expectations fell for a third consecutive month to 3.9 per cent from 4.2 per cent.

Callum McLaren-Stewart at Citi said: “There remains the risk that further food price inflation … can drive these series higher in the coming months but so far it does not appear to have meaningfully impacted expectations.”