[an error occurred while processing this directive]
BBC News
watch One-Minute World News
Last Updated: Tuesday, 9 January 2007, 11:43 GMT
Why is the price of bread important?
WHO, WHAT, WHY?
The Magazine answers...

Bread
An everyday staple
The price of bread could soon rise to 1 a loaf, bakers are warning. But why is the cost of bread so important?

Tea and toast, probably the most popular way to start the day in the UK.

But if you've been reading the paper over breakfast in recent days, it would have been hard to miss the headlines about the price of a standard loaf of bread rising to 1 any day soon.

The price hike has been blamed on poor wheat harvests overseas increasing the cost of flour by 15%. The finger has also been pointed at rising energy prices.

But what's with all the column inches? Why is the price of a loaf considered so important?

Beer

Experts say the price of bread has historically been an emotive issue, even though economically it is not that significant. This is down to the fact that it is such a staple of the British diet.

"You can expect to find bread in almost every home in the country, which makes it a key product, " says a spokesman for The Grocer magazine. "People relate to it and everyone has a notion of what a loaf of bread costs, which is why the price is so keenly watched."

RISING COST OF BASIC LOAF
1970 - 9p
1980 - 33p
1990 - 50p
2000 - 52p
2007 - 94p
SOURCE: ONS
It is one of the foods included on the government's Consumer Prices Index (CPI), which tracks the average price of a selection of everyday goods that Britons typically spend their money on. The CPI classes the 800g white sliced loaf as the standard.

The fact that it is such a part of British life has made bread a political football over the years. In the 1974 general election, the then shadow minister Shirley Williams impressed upon voting housewives the effects of inflation using the basic loaf.

"Bread, standard white loaf. In 1970, you could buy it for nine pence," Ms Williams said in an election broadcast. "Today, it costs no less than 15 pence. The three shilling loaf is here."

Soar

Despite the bread market being worth an estimated 2.9bn a year in the UK, it is not viewed as a significant key economic indicator, unlike for example house prices.

But any price increases make the headlines because it is often viewed by the public as indicative of what is happening to prices in general.

"People have traditionally used bread to gauge the cost of living," says economist Edward Dale.

WHO, WHAT, WHY?
BBC graphic
A feature to the BBC News Magazine - aiming to answer some of the questions behind the headlines

"If the rising costs of making a loaf are starting to show up in prices on the High Street, it causes concerns about other products. The public view bread as a general gauge for inflation."

Although it is not a key economic indicator, the cost of bread is still watched by the financial markets because of its key ingredient - wheat.

"Grains impact on the price of most foods," says Mr Dale. "The current rise in wheat prices is also expected to increase the price of substitutes, such as barley and corn. This would affect the price of beer and breakfast cereals.

"Eggs, cheese and dairy products could also cost more as farmers have to shell out more for feed."


Your comments

"The finger has also been pointed at rising energy prices." Having worked in a large factory bakery during my student days, I can tell you that they waste a massive amount of energy. The main oven is open at each end, making the building in which it is housed almost as hot. Not at all pleasant working conditions. If the bread manufactures address this obvious and blatant energy waste, they would surely see their fuel bills fall, a saving that could be passed onto the customer and a positive move in today eco conscious world.
M Davidson, Middlesbrough

Please spare a thought for the farmers who are producing your food at minimal margins or at a net loss at the expense of the supermarkets. Rising energy costs increase the costs of producing the grain yet farm gate prices have remained low, even falling still. The increase in the price of bread may eventually filter down to the producers but in the meantime it is the supermarket giants who will gorge themselves on the profit for this one. If you want environmentally friendly, local, fresh food then I am afraid that you will have to pay more for it. I would rather pay 1 for a loaf of bread made in the UK to high standards than pay less for poor quality, cheaper imports.
Kate, Shropshire

It is hard to believe this is a rise in cost. When I go to the grocery it is not at all unusual to see a loaf for between $1--$3.50. Plus, locally there is a 9% sales tax (only bibles are exempt from tax).
Kara Tyson, Mobile, Alabama

If you do the maths it's quite shocking. We keep hearing how low inflation is yet when you look at these figures it shows inflation averaging 10% a year for the last 4 years, something I can see every week as I've seen my weekly shopping bill almost double in the last few years. Compare that to the previous 23 years where inflation is shown to have run at below 2% a year on average.
Mark Bestford, Oxford

The amount we have to pay for bread, milk and everyday essentials are ridiculous! Our bread over here is too over priced! The cheapest loaf is 1.13 and the Hovis brand is around 1.40. Milk is 70p per litre!!!!! You think you have it easy!
Lucy, Guernsey

The price of a loaf of bread has been a pound or more in my area for a long time now. Which just goes to show that the true picture of inflation and price increases are worse than the statistics the government seen to come up with.
Mark, Northants

Its costs me $0.80 for a loaf of bread, thats 41p. Thats just one example in a million things that i can buy at almost half the cost here in america compared to home in England. Maybe i'll come home once its not so expensive to live there.
Rowan Smith, Brit in Peoria, IL, USA

M Davidson is in cloud cuckoo land if he thinks for one minute that savings due to energy efficiency would passed on to the customer, shareholders more like! As for inflation, any govt. fiqures on inflation aren't worth the paper they are printed on as the don't include utility prices and a whole host of other out of control prices. Weak harvests, energy hikes any excuse to make an extra couple of pence. Welcome to Gordon Browns dynamic economy, anyone else get the feeling that we are all being taken for a ride here? I wonder how musch the same bread has risen in France, Italy, Germany? or is it just Britain that has these rising factors?
Eddie, Wembley

Name
Your e-mail address
Town/city and country
Your comment

The BBC may edit your comments and not all emails will be published. Your comments may be published on any BBC media worldwide.






FEATURES, VIEWS, ANALYSIS
Has China's housing bubble burst?
How the world's oldest clove tree defied an empire
Why Royal Ballet principal Sergei Polunin quit

PRODUCTS & SERVICES

Americas Africa Europe Middle East South Asia Asia Pacific