Rising prices top concern for UK households: BRC survey

The latest figures by the Office for National Statistics (ONS) showed that inflation is now 3.8 per cent, almost double the Bank of England’s target of 2 per cent.

Retail price inflation has been rising steadily over the last year, accelerated by the impact of the previous Budget, which significantly increased employment costs, as well as introducing a new packaging tax on retail businesses, BRC said in a press release.

The last budget increased retailers’ costs by £7 billion through higher employer National Insurance Contributions (NICs), an uplift in the National Living Wage (NLW), and the introduction of a packaging tax. It is therefore no surprise to BRC that the latest Monetary Policy Committee (MPC) minutes attributed rising food prices to ‘labour costs and costs linked to new packaging regulation,’ alongside higher commodity prices.

The BRC has warned that food inflation could climb and stay above 5 per cent well into 2026 if the Autumn Budget brings further tax increases for the retail sector. While the government has promised to cut business rates for retail, hospitality, and leisure premises, around 4,000 large stores may actually face higher rates if they fall under the new surtax on properties valued above £500,000, added the release.

“The government risks losing the battle against inflation and working families are understandably worried. With many people barely recovering from the last cost of living crisis, the Chancellor will want to protect households and enable retailers to continue doing everything they can to hold back prices,” said Helen Dickinson, chief executive at the British Retail Consortium.

“The Treasury is currently finalising its plans to support the high street, including a much-needed reduction in business rates for retail, hospitality and leisure premises. However, the biggest risk to food prices would be to include large shops—including supermarkets—in the new surtax on large properties,” added Dickinson. “This would effectively be robbing Peter to pay Paul, increasing costs on these businesses even further and forcing them to raise the prices paid by customers. Removing all shops from the surtax can be done without any cost to the taxpayer and would demonstrate the Chancellor’s commitment to bring down inflation.”

ALCHEMPro News Desk (SG)