IT is bizarre that an inflation rate of 6.8% is being seen as good news. It is certainly a move downwards from the June rate of 7.9% – but it is still well ahead of the eurozone rate closer to 5% and a United States rate around 3%.

The rate remains over three times the Bank of England target and the government's commitment to half the rate by the end of the year looks doubtful. It is also unlikely to be a sufficiently big reduction to dissuade the Bank of England from at least one more interest rate rise.

The factors driving down the rate are well known and focussed around energy costs, as markets return to more normal conditions from the spike after Russian aggression in Ukraine created market chaos. This has worked through the economy, but we also know where inflation is not falling.

These areas include wages, the service sector and of course the most visible inflation for most consumers – the price of food. Just as the main rate has fallen from a peak of 11%, the food rate is down, but is still stubbornly in double figures at close to 15%.

As with the other measures this leaves the UK out of step with the eurozone, the US and other G7 countries. All in all we are moving in the right direction, but more slowly than other economies. That reflects the underlying weakness of the economy, which is not generating the growth needed to drive the revenues needed to support higher costs for public services.

The question no economist seems to have answered is why the food price inflation rate is so persistently high, when the global price of food is falling and when farmers are being paid less for what they produce. The easy answers simply do not hold up to scrutiny. Number one is the war in Ukraine, which was the issue that started the food price ball rolling.

However despite all that Russia has done to destabilise agriculture in Ukraine, including reneging on the deal that opened Black Sea ports for grain exports, trade is beating the odds. Ukraine is exporting grain and other crops, thanks in no small measure to the solidarity lanes put in place by the EU to aid exports by road and rail through EU member states bordering Ukraine.

This has seen Ukraine become the second biggest food exporter to the EU. Limited access to Ukraine and no access to Russia us affecting global food availability, but it does not explain why UK food price inflation is worse than in in any EU member state.

The other issue of course is always the weather and this year the weather has certainly made headlines for its extremes. Much of Europe had a poor start as the result of an unusually cold and wet Spring; then along came the summer heat-waves that wreaked such havoc across Europe.

Despite that, the latest yield estimates are that wheat and oilseeds will be better than last year and ahead of the EU average, mainly because from the cold Spring to the heat conditions were largely favourable in the key European production areas. With that, so disappears another convenient explanation for rampant food price inflation.

According to the UN Food and Agriculture Organisation global food prices rose by 1.3% from June to July, driven by vegetable oils. This still left them 12 per cent below the levels of July 2022. Soya and rapeseed oil prices both rose because of concerns over production in north America.

Beef was hit by increased exports from the southern hemisphere when demand was weak in Asia. Sheep prices were also hit by increased exports in the face of weak demand from Asia and Western Europe. Dairy prices dipped in July – the seventh consecutive month of falling prices – and are now 20% down year on year. A small grain price fall was driven by lower maize prices. Wheat prices rose by

1.8% from June to July, the first rise for nine months, leaving cereal prices 14.5% down on July 2022.

Add all this together and even allowing for wage price inflation in food processing and retailing, what is happening to prices on supermarket shelves to create a cost of living crisis does not seem justified by the wider economics around food prices.