The UK is more at risk of the impact of high food prices than many other countries, according to Ernst & Young's Item Club.

World food prices have soared in recent years, due partly to rising demand from China and land previously used for food production being use to produce crops for biofuel, as well as adverse weather conditions in large parts of the world.

The UK has a trade deficit in food, the survey warned, compared to the US which has a balance of food and France with surplus production.

The Item Club warned that the government was facing a choice between sticking rigidly to its 2.0% inflation target and relenting on this to deliver interest rate cuts.

"There is a good case for switching the target to core CPI inflation, which excludes the effect of food and energy prices," the report says.