The increasing cost of sugar is driving food prices to record highs, new figures have revealed, amid warnings shop inflation is yet to peak.

Shop prices are now 8.9% higher than they were a year ago, up from February’s 8.4% increase, according to the British Retail Consortium (BRC)-NielsenIQ index.

Overall food inflation accelerated to 15%, up from 14.5% last month, while the price of fresh food is now 17% higher than last March – the highest rate on record.

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The rising cost of sugar, coupled with high manufacturing costs, has contributed to price rises for chocolate, sweets and fizzy drinks. Fruit and vegetable prices have also risen as poor harvests in Europe and North Africa limited availability.

But there are warnings the UK has not seen the worst of the surging prices.

BRC chief executive Helen Dickinson said: “Shop price inflation has yet to peak.

“Food price rises will likely ease in the coming months, particularly as we enter the UK growing season, but wider inflation is expected to remain high.”

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Mike Watkins, head of retailer and business insight at NielsenIQ, said: “Inflation continues to have an impact on the spending power of shoppers and increased energy bills from April will add more pressure.”

“Since food prices have risen retailers have seen more visits but less basket spend, as shoppers manage their weekly food bills by shopping little and more often and seeking out the lowest prices.

“And as Easter approaches some high street retailers will also be offering discounts and promotions to encourage customers to spend.”