Chancellor warns food industry of public worry over food prices

In a meeting with industry leaders yesterday Jeremy Hunt said that the Government would continue to work up measures alongside businesses on how the pressure on households can be eased.

It comes as the high cost of food continues to threaten to derail the Prime Minister’s pledge to halve inflation ahead of tomorrow’s statistics.

The Chancellor also yesterday met with the Competition and Markets Authority (CMA) where he was told that it was “stepping up” its investigation into grocery prices and what action it would take to intervene to protect the public from high costs at the supermarket.

Food inflation currently sits at 19.2 per cent, while the overall level of inflation is set to fall to around 8.2 per cent tomorrow, according to analysts.

NFU chief adviser food business unit Amy Fry said: “We continue to constructively engage with the supply chain to ensure that they understand the unprecedented challenges farmers and growers continue to face due to soaring energy costs, cost inflation and workforce shortages.

“Retailers do have an important role to play in helping the industry through this crisis, working with suppliers to continually evolve contracts so they are fit for purpose.

“Producers must have the confidence they need, working within a fair and transparent supply chain, ensuring fair returns, so they can do what they do best; meeting demand from shoppers for quality, affordable home-grown food.”

Ash Amirahmadi, Managing Director of Arla Foods, told The Yorkshire Post that it was starting to see some wholesale prices fall, but warned it may not be seen immediately by consumers on the shelves.

“Since the Autumn of 2021 our farmers have experienced significant cost pressures due to global factors of conflict and the disruption coming out of Covid,” he said/

“Our farmers have had to pay significantly more for their feed, fertiliser and fuel; and these factors have disproportionally impacted the global dairy sector, including the UK.

“Global dairy markets are now beginning to ease driven by a change in supply and demand of dairy products and that is positive.

“There is a lag in the reaction to these markets compared to what shoppers see on the shelf.

“This means that prices don’t change instantly – in the same way that prices don’t rise instantly, they also don’t fall immediately either.

Downing Street and the Treasury were yesterday handed a welcome boost, with the International Monetary Fund (IMF) upgrading its forecast to predict that the UK will now avoid a recession this year.

The IMF, in a new assessment of the UK economy, upgraded growth to 0.4 per cent this year after initially forecasting last month that UK output was expected to contract by 0.3 per cent.

IMF managing director Kristalina Georgieva said that the Government’s aim of halving inflation was “not a trivial goal, but in our view, it is achievable.”