Inflation cost of living crisis food costs grocery

Economists are expecting the price of food and drink to increase next year, after inflation hit a two-year high in late 2016.

Cross-category prices rose by 1.2% in the year to November, with analysts predicting consumer prices to rise by 2% by the end of March as factors including the pound’s decline take hold.

Between October and November last year, food and drink prices rose by 0.4%. Barclays bank expects prices to continue growing throughout 2017.

Mike Cherry, national chairman at the Federation of Small Businesses, said small firms were beginning to notice the negative impacts of the pound’s lower value.

“This is happening during a period of economic uncertainty and a whole set of rising business costs such as the national living wage and pension auto-enrolment,” he said.

“We want Ministers to focus on measures that will help boost growth and jobs – like increasing the Employment Allowance and putting quarterly tax reporting plans on hold.”

Earlier this month, research conducted by RN found that around 20 suppliers are warning retailers of price increases of between 5% and 12% as a result of Brexit.