Food price inflation could rocket to six per cent in the next five months due to Labour's budget, retail experts warn

Daily Mail​

5 days ago

Food price inflation is set to skyrocket to six percent by the end of year due to Labour's previous budget and could pose 'significant challenges' to households, retail experts have warned.
The British Retail Consortium (BRC) has predicted food inflation, which currently sits at four percent, will rise by two percent in the next five months.
Over half of retail chiefs, representing over 9,000, told a survey carried out by the industry body that they feel 'pessimistic' about upcoming year, an are expecting more price rises.
And most, 85 per cent, blamed price rises on Rachel Reeves ' budget plans, which saw the Chancellor increase employer national insurance and the national living wage in April.
The BRC said of the predicted rise in food costs: 'This will pose significant challenges to household budgets, particularly in the run-up to Christmas.'
Nearly half of chief financial officers also revealed they had frozen hiring, while 38 percent had lowered the number of in-store jobs, which was further supported by official job figures.
In the first quarter of 2025, there were almost 100,000 fewer retail jobs in comparison to the previous year, according to the BRC.
And while a third of CFOs confessed they had slashed local community investment, another 15 percent had delayed opening new branches.
BRC chief executive Helen Dickinson told The Independent: 'Retail was squarely in the firing line of the last budget, with the industry hit by £7 billion in new costs and taxes.
'Retailers have done everything they can to shield their customers from higher costs, but given their slim margins and the rising cost of employing staff, price rises were inevitable.
'The consequences are now being felt by households as many struggle to cope with the rising cost of their weekly shop.
'It is up to the Chancellor to decide whether to fan the flames of inflation, or to support the everyday economy by backing the high street and the local jobs they provide.'
Last January, the industry body anticipated food prices would skyrocket, on average, by 4.2 percent towards the tail end of the year, as retailers grappled with heightened costs as a result of the budget.
Ms Dickinson previously said analysis from both industry heads and the trade association suggested there was 'little hope of prices going anywhere but up' due to national living wage and national insurance hikes.
Last week, Worldpanel by Numerator, a market research firm previously known as Kantar, said grocery prices were soaring at the fastest rate in the last year and a half.
In the four weeks to July 13, food cost inflation rose to 5.2 per cent, up from 4.7 per cent the month prior - the highest since January 2024.
Shoppers are predicted to spend £275 more annually on average, according to the market research firm.