Food prices are the highest they have been for more than a year according to a report from the British Retail Consortium (BRC).

Food inflation has increased from 2.5pc in July to 3.8pc in August of this year. A combination of factors including increased temperatures and the rise of wheat and sugar costs has contributed to the greatest jump in food prices since July 2009, say experts.

Meanwhile, overall inflation has crept up by 0.2pc reflecting slow growth.

Nielson, which monitors the Shop Price Index collecting figures from five consumer sectors- food, hardware, furniture, electrical, clothing, and other goods- has attributed the increase in prices to unusual weather and an extended sale period.

Mike Watson, senior manager of retail services at Nielson, said "The August Shop Price Index (SPI) reflects a month where weather, seasonal food inflation, some commodity price increases, the end of early summer promotions and discounting in non foods, contributed to a slight upward movement in shop prices."

Higher living costs

The price of wheat is up 40pc since the beginning of last month. This was caused largely by severe droughts in Russia, destroying 10 hectares of agricultural land, and President Vladimir Putin's subsequent protectionist ban on exports.

In turn, this has had an immediate effect on the price of livestock feed. Expensive fertilisers and the increased use of high-cost biofuels are also key contributors, which have been "filtering through to food prices."

Stephen Robertson of the BRC has been quick to dismiss speculation that today's findings could lead to dramatically higher living costs and possible food shortages. He said new figures where "nowhere near the return of the double-digit food inflation of two years ago" and that there was a danger or overestimating their affects.

Personal debt risk

Despite this, critics have warned that this may spell more difficulties for poorer families who already spend 12pc of their budgets on food.

Watkins of Nielson has predicted that in response to the higher food prices, retailers would reduce market prices. Citing milk and bread as typical examples he said that "a third of groceries are now on promotion and customers are shopping around" in an attempt to economise.

However Steven Jackson of debt expert at beatmydebt.com is concerned that rising prices will case debt problems for many families. "There are a lot of people who are struggling to make ends meet. The rising cost of essential items such as food will mean that they have to find additional money from somewhere. If there are no savings to fall back on, people will naturally increase spending on their credit cards" he warned.

Meanwhile, global food prices are at a two- year high. This week has seen riots in Mozambique and reduced meat production from Argentina, America and Australia also due to adverse weather. A sharp increase in import demands from the growing economies of China and India has also had the effect of pushing international prices up.

The SPI is compiled by charting changes in the prices of 500 commonly bought items across the country including groceries, confectionary and household goods.