Retailers say Reeves’ budget is directly to blame for rising food prices in the UK
The latest food inflation data from the Bank of England shows the last budget was directly responsible for pushing food prices higher in the UK.
“The Bank of England report outlines how the last Budget continues to push up food prices. Government policy will add £7 billion to retailer costs this year, from higher employment costs to the introduction of a new packaging tax,” said Helen Dickinson (Chief Executive at the British Retail Consortium).
“Food prices have already been climbing steadily, and the BRC has warned this is only the beginning.”
Dickinson cautioned that 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.
“While retailers are doing everything they can to shield their customers from rising prices, their ability to absorb further costs is extremely limited.
“If the 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,” she said.
Eyes on Autumn budget
Higher prices are also being seen in the British Retail Consortium’s data, which shows rising food inflation meant increased spending was more a result of higher prices than improved demand.
The UK’s fifth warmest July on the Met Office record brought a boost to home appliance and food and drink sales. But rising inflation was also a driver of the latter, and monthly non-food sales are only growing at around 1% on average at present.
With employment costs having risen and inflation on both the business and consumer sides putting pressure, it remains a challenging trading environment for many retailers.
“With sales growth at these levels, it is barely touching the sides of covering the £7 billion new costs imposed on retailers at the last Budget,” said Dickinson.
“If the upcoming Autumn Budget sees more taxes levied on retailers’ shoulders, many will be forced to make difficult choices about the future of shops and jobs, and ongoing pressure would push prices higher. Ultimately, this means more families struggling, particularly those on lower incomes, reduced consumer spending, and a drag on economic growth.”
