Food inflation will rise to 6% by the end of the year – posing a “significant challenge” to household budgets in the run-up to Christmas, industry leaders have predicted.
The British Retail Consortium is warning that the chancellor risks “fanning the flames of inflation” if she hikes taxes in the coming budget.
Despite intense price competition between supermarket chains, the BRC has sounded the alarm over the pace of grocery price hikes.
As of this month, food inflation has risen 4% year on year – its highest level since February 2024.
The BRC said this increase is linked to global factors, such as high demand and crop struggles.
Beef, chicken and tea prices are among those that have risen the most this year – but some of the blame is being laid squarely at the chancellor’s door too.
The BRC said it was inevitable that a £7bn burden, through changes to employers’ national insurance contributions and minimum pay rules after last October’s budget, had been partly passed on to customers in the form of higher prices.
It published the results of a survey of retail industry finance chiefs to illustrate its point – that nerves about what Ms Reeves’s second budget could bring were not helping companies invest in either new employment or prices.
Business was promised it would be spared additional pain after it was put on the hook for the bulk of the chancellor’s tax-raising measures last year.
However, speculation is now rife over who will feel the pain this autumn as she juggles a deterioration in the public finances.
