Food prices are expected to rise significantly next year after ministers failed to act on repeated warnings from supermarkets about the effects of the Iran crisis, MPs have been told.
Prices could rise by more than 6 per cent, and the British Retail Consortium (BRC) said ministers made no progress on protecting the food supply chain from soaring fuel and fertiliser costs.
Food and drink inflation will reach 3.9 per cent by December and peak at 6.4 per cent in July next year, according to forecasts by the Food and Drink Federation. Separate forecasts from the Institute of Grocery Distribution (IGD) suggest that food inflation will reach an average of between 5.6 per cent and 6.6 per cent across next year.
Bligh also blamed government policy for adding to the pressure on retailers. He said changes to employment costs, business rates and packaging charges, among other measures, had added about £8bn a year to costs across the retail sector since the last general election.
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