Anne Bruce

The UK has dropped down the world rankings of retail bread prices, despite price increases in bread over the year, putting the UK in line with those in the developing world.

According to latest data from the Economist Intelligence Unit (EIU), released exclusively to British Baker, London and Manchester were among the cheapest cities in the world to buy bread.

The Worldwide Cost of Living survey shows London’s bread prices were 83rd cheapest in the world in autumn 2008 - a drop from 70th cheapest in autumn 2007. Manchester was in 95th position out of 133 cities.

Global commodity price rises such as wheat and oil had pushed prices up round the world when the latest survey was conducted in autumn 2008, said food and drink analyst and survey editor Jon Copestake.

"Bread prices were peaking at the time of the survey, but that inflationary period will now have been kicked into touch by the credit crisis," he said. "Bread tends to be discounted quickly and used as a loss leader by the supermarkets."

The average cost of a kilo of bread sold in London was up 29p on the previous year, to £1.74, the survey suggests. The average kilo cost £1.51 in Manchester, up from £1.11 the year before. Vienna was the most expensive city in the world to buy bread, at £5.27/kg, while Tehran, Iran, was cheapest at 17p/kg.

The EIU sends mystery shoppers to three bands of retailers in each city - classed as low, medium and high. For bread, the ’low’ classification covers supermarket chains, ’medium’ includes top-end food retailers, such as M&S, and ’high’ covers boutique shops and department store food halls.