These items will cut your food bill!

Food prices have soared 11.3% over the last year. We reveal what you should be putting in your shopping baskets now.

Last month, I highlighted the winners and losers from falling inflation.

But while the Retail Prices Index (RPI) fell to zero for the first time in almost 50 years, the Consumer Prices Index (CPI)  - the government's favourite measure of inflation - actually rose to 3.2% in February.

So what exactly is going on behind these numbers?

Let's start by looking at some figures from the Office of National Statistics (ONS). Every month the government body publishes a detailed report showing the items that have changed in price over the month, and by how much.

The basket of goods

The most striking recent price fall is housing costs - dramatic cuts in the base rate have seen annual mortgage interest payments fall by almost 40% over the last year. On top of that, cheap imports from China have pushed down the price of electronic goods by 15%. It's important to note that housing costs aren't included in the CPI, but are included in the RPI. That's the primary reason why the RPI is so much lower than the CPI at the moment.

In contrast, the biggest factor holding up both indices is food, which showed a monthly rise of 1.7% and an annual rise of 11.3% according to the RPI.

Food prices have quickly become a hot topic. Last month, the British Retail Consortium, which compiles its own shop price index, said fresh meat drove food inflation to its highest rate since last September.

It also said the weak pound has made UK produce more attractive for overseas buyers - higher demand means prices are more likely to rise.

I suspect the rising price of food means that many of us think our personal inflation rate is way higher than 0%. After all, we can do away with fancy flat screen televisions and DVD players, but it's a different story when it comes to food. After all, we've all got to eat.

So, in terms of cost, what items should we be putting in our food baskets? And what needs to be left firmly on the shelves?

Here's a quick look at the annual movements of a range of food items, according to the RPI:

The largest prices rises have been in meat, with annual lamb prices up by over 21% and beef up 20.6%.

Poultry is up by a lesser 11%, while slower still is fresh fish, which has only gone up 2% over the year. So, if you fancy a bit of Pomfret or Pollack (or, as Sainsbury's would call it, Colin), fish hasn't suffered the dramatic price rises of other meats.

While meat-eaters may be getting a raw deal in terms of inflation, vegetarians shouldn't start celebrating yet. Vegetables are up almost 22% annually, while potatoes have risen 12.4%, and fresh fruit is up 14% on the year.

The truth is, it's hard to find a food item that hasn't gone up in price. However, there are some products which have remained relatively steady.

Eggs, which shot up in price last year actually fell 2.4% last month, and have risen a comparatively less 4.7% over the year. In fact, butter was the only category where prices fell over the year, with prices down 2.1% annually and 0.5% monthly. Anyone fancy an omelette?

It's also relatively good news for junk food lovers, as sweets and chocolate have risen a lesser 10% on last year, while soft drinks are up 2.8% annually.

Coffee, while up 9.8% annually, is down 3.4% month on month - meaning your early morning fix should cost you less this month.

Don't stay in, go out!

While your shopping basket continues to rise in price, eating out, while more expensive than last year, is not rising as fast.

Restaurant meals are up just under 4% annually, compared to food price rises of 11.4%.

Considering all the 241 deals in newsletters such as our fabulous Frugal Friday, and the findings in our recent article, Eat out for less than a takeway, getting creative could mean going out could be cheaper than staying in with those TV dinners.

Cut the costs!

If you prefer to shop online than face those crowded supermarket aisles, MySupermarket.com will find you the cheapest prices for the items you want, search for any deals on those items, then deliver the whole lot to your doorstep!

The process is quick and seamless, and you choose a delivery slot so you don't miss your shopping.

In addition, read these tips from Malcolm Wheatley to discover some savvy ways to cut your food bill.

Food price rises don't look like they'll ease any time soon. And unless you're going to live on bread and water (which, by the way is up 8.8% and 6.5% respectively), we will be paying more for our food this year than we did last.

So, shop savvy, take advantage of those deals, and you'll be halfway to checking out a bargain basket...

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