Skyrocketing food prices could add approximately £290 to the average family's yearly food bill by the end of the year, taking the average cost of a weekly shop to £100 for the first time. The Bank of England has narrowly decided to reduce interest rates from 4.25 per cent to 4 per cent. The nine-member Monetary Policy Committee voted five to four in favour of lowering borrowing costs to their lowest level in over two years, after re-running the vote for the first time ever. This fifth interest rate cut since last August will benefit more than a million borrowers with variable rate mortgages, and an additional 900,000 whose affordable deals will expire by the end of the year. However, millions of savers could be negatively impacted if providers decide to lower their pay as a result. Despite this cut, the Bank has warned that inflation is predicted to reach 4 per cent by September, which is double its 2 per cent target. One of the main factors is the concerning resurgence of higher food prices, considering groceries account for just over a tenth of overall living costs, and even more so in lower income households. The Bank predicts that food price inflation will rise from 4.5 per cent to 5.5 per cent by the end of the year, reports the Mirror . With the average household spending £5,283 annually on groceries, this anticipated increase could add £290 to bills if households do not alter their shopping habits. In a setback for Chancellor Rachel Reeves, the Bank attributed part of the surge to April's rise in employers' national insurance and the national minimum wage. "These material increases in labour costs are likely to have pushed up food prices," the Bank stated, estimating they had contributed between 1 per cent and 2 per cent to food price inflation with further impacts anticipated. With rising costs for businesses affecting every employer, many have chosen to lay off workers. It further noted: "To reduce the need for higher prices, many firms along the supply chain were trying to mitigate cost increases, including through reductions in headcount." International farming expenses have also climbed, partially fuelled by severe weather conditions, whilst a fresh recycling levy is starting to take effect, the Bank outlined. Certain items are experiencing steeper price rises than others. Tea and coffee serve as prime examples, with figures from Trolley.co.uk revealing a 300g jar of Nescafe instant has climbed from an average £5.02 in December to £5.27 last month, whilst a 160 bag pack of Yorkshire Tea has jumped 14.6 per cent from £5.19 to £5.95 over the past year. Retail leaders are now cautioning that reforms to commercial property taxation could "fan the flames of food inflation." The Government is proposing to revamp business rates - a levy paid to local councils - to create fairer conditions for independent retailers but which will likely result in increased costs for major stores and distribution centres. Helen Dickinson, Chief Executive at the British Retail Consortium, warned: "The Bank of England report outlines how the last Budget continues to push up food prices. Government policy will add £7billion to retailer costs this year, from higher employment costs to the introduction of a new packaging tax. "Food prices have already been climbing steadily, and the BRC has warned this is only the beginning. If the Autumn Budget once again lands on the shoulders of retailers, then it will only serve to fan the flames of food inflation – with poorer families being hit the hardest by the Treasury's decisions." She continued: "While retailers are doing everything they can to shield their customers from rising prices, their ability to absorb further costs is extremely limited. "If Government goes ahead with its planned higher business rates threshold for 4,000 larger stores – including many supermarkets – then it will be ordinary households who suffer the most. ".