UK food prices will jump 15% this year, industry boss warns Business News

Food prices could jump 15% this year due to the war in Ukraine, according to an industry leader.

Russia and Ukraine are two of the world’s largest wheat suppliers. The invasion also caused energy costs to spike, making fertilizer, transportation, and heating more expensive.

Ronald Kers, chief executive of food company 2 Sisters, told the BBC Today program under which the prices paid to farmers for chickens had increased by 50%.

He said that if the war continues for months, “basically it means that as a country we may have to start importing less and producing more ourselves.”

“We need to work with all partners in the food supply chain to find a solution to make us a country less dependent on imports…it’s a very complex issue.”

Mr Kers said Brexit had made it harder to work with Europe to ensure food security.

Last week the National Farmers Union (NFU) wrote to ministers, urging them to make food safety a top priority.

Wheat prices in the UK are 39% higher than a year ago, according to the Agriculture and Horticulture Development Board. Farmers also had to contend with a fivefold increase in fertilizer prices.

The latest warnings came as economists predicted that the poorest households would face headline inflation of up to 10% this year, well above the peak for the wealthiest families.

The Resolution Foundation think tank said rising food and energy prices risked a second peak in inflation this fall, with the consumer price index rising above 8%.

In a report on Monday, the foundation called on the chancellor to focus support in his upcoming spring statement on low- and middle-income families hardest hit by the cost of living crisis.

The financial outlook for many families is “bleak” and Russia’s invasion of Ukraine means the UK’s economic outlook has “worsened markedly”, the think tank said.

He predicts that a typical family could see their real income drop by around £1,000 this year due to rising prices.

Currently, the poorest and wealthiest households are affected relatively equally, but soaring food and energy bills in the fall would hit lower-income groups the hardest, according to the report.

The foundation has recommended increasing benefit payments by another 5% on top of the currently planned 3.1%, to keep payments in line with inflation.

“The chances of a recovery in living standards this year are falling as rapidly as inflation is rising, and the risk of another recession looms,” said James Smith, research director at the Resolution Foundation.

“The Chancellor will therefore have to make difficult, and potentially costly, choices about how to respond.”

He added: “The Chancellor cannot entirely shield Britain from the difficult times ahead, but he must act urgently to ensure the pain is shared fairly.”

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This notice was published: 2022-03-14 20:42:41

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