UK Retailers Blame National Insurance Hike and Energy Bills for Food Price Surge
The UK's food price crisis has intensified, with retailers blaming the recent hike in national insurance contributions and soaring energy bills for a 3.9% year-on-year increase in food prices. According to the British Retail Consortium (BRC), shop price inflation jumped 1.5% in January, exceeding economists' expectations of a 0.7% rise.
Fresh food inflation surged to 4.4%, with meat, fish, and fruit experiencing particularly sharp increases due to weak supply and strong demand. Non-food categories, such as furniture, flooring, and health and beauty products, also saw significant price hikes.
The BRC's chief executive, Helen Dickinson, attributed the surge in prices to high business energy costs and the ongoing hike in employers' national insurance contributions (NICs), which was introduced by Chancellor Rachel Reeves last April. The threshold for NICs being levied was cut from £9,100 to £5,000 a year, leading to an additional 1.2 percentage point increase in shop price inflation.
Dickinson warned that the combination of these two hikes meant retailers were facing a 10% increase in employment costs for full-time workers and a 13% rise for part-time workers. "It is a challenging time for households," she said. "Retailers do what they can to keep prices down, but thin margins and rising government policy costs make it harder."
The BRC's analysis showed that the cost of employing a full-time minimum wage worker had increased by 10%, while part-time workers faced a 13% rise in employment costs. These increases were now being felt throughout the supplier's food chain.
Treasury officials denied that the hikes were driving up inflation, arguing that "fair and necessary" decisions made at the budget had delivered stability and cut borrowing. However, economists and retailers have warned of persistent price pressures, with some predicting that inflation will remain above forecast levels in the coming months.
The latest data from the BRC has added to growing concerns about the UK's inflation crisis, which appears more sticky than initially thought. Official figures released last week showed inflation rose to 3.4% in December, while a closely watched survey reported a sharp rise in costs in January.
The UK's food price crisis has intensified, with retailers blaming the recent hike in national insurance contributions and soaring energy bills for a 3.9% year-on-year increase in food prices. According to the British Retail Consortium (BRC), shop price inflation jumped 1.5% in January, exceeding economists' expectations of a 0.7% rise.
Fresh food inflation surged to 4.4%, with meat, fish, and fruit experiencing particularly sharp increases due to weak supply and strong demand. Non-food categories, such as furniture, flooring, and health and beauty products, also saw significant price hikes.
The BRC's chief executive, Helen Dickinson, attributed the surge in prices to high business energy costs and the ongoing hike in employers' national insurance contributions (NICs), which was introduced by Chancellor Rachel Reeves last April. The threshold for NICs being levied was cut from £9,100 to £5,000 a year, leading to an additional 1.2 percentage point increase in shop price inflation.
Dickinson warned that the combination of these two hikes meant retailers were facing a 10% increase in employment costs for full-time workers and a 13% rise for part-time workers. "It is a challenging time for households," she said. "Retailers do what they can to keep prices down, but thin margins and rising government policy costs make it harder."
The BRC's analysis showed that the cost of employing a full-time minimum wage worker had increased by 10%, while part-time workers faced a 13% rise in employment costs. These increases were now being felt throughout the supplier's food chain.
Treasury officials denied that the hikes were driving up inflation, arguing that "fair and necessary" decisions made at the budget had delivered stability and cut borrowing. However, economists and retailers have warned of persistent price pressures, with some predicting that inflation will remain above forecast levels in the coming months.
The latest data from the BRC has added to growing concerns about the UK's inflation crisis, which appears more sticky than initially thought. Official figures released last week showed inflation rose to 3.4% in December, while a closely watched survey reported a sharp rise in costs in January.
food prices are through the roof and it's not just the usual suspects like veggies and eggs anymore, even things like meat fish and fruit are seeing huge price hikes 
. i'm no economist but even i can see that national insurance hike and energy bills aren't helping matters. it's all about thin margins for retailers right now, they're trying to keep prices down but it's a losing battle 
.
. it's not just the cost of living that's increasing, it's also the number of hours you need to work just to make ends meet 
. let's hope the gov doesn't keep piling on more costs with their policies 
!
and btw, who thought it was a good idea to cut nic threshold from £9k to £5k in one go? 
. It's like we're being squeezed from all sides.
.
! Its all about weak supply and strong demand, which just makes it harder for retailers to negotiate better deals. I mean, I get that its a challenging time for households, but come on, the gov needs 2 do somethin about this 
. If retailers cant keep prices under control, then we're in fer a world of trouble 
. The gov's all like "fair and necessary" decisions, but I'm like, what about the people who r gettin affected by these hikes? 
I'm not surprised by this news at all... it's like we're back to the '80s or something!