Families are facing food prices that are rising even higher than they are now and remain high for some time, the Asda chief warned today.
Tory’s peer Lord Rose said the sharp rise in raw material costs will reach a new, consistently high level, which will have an impact on the trails.
Prices for sunflower oil, wheat and oil have been affected by the war in Ukraine, while gas prices have been rising before the conflict began in February.
This week it was revealed that the price of food in the UK is rising at its fastest pace in 11 years, adding an additional £ 271 to the amount that average households will pay by this year.
Data from market researcher Kantar shows that overall food price inflation reached 5.9% this month, the fastest rise since December 2011 as the number of promotional items in supermarkets declined.
Prices are rising the fastest for products such as dog and cat food, fresh lamb and beef, spicy snacks and chips, but they are falling in spirits – as rising prices cause the biggest strain on household incomes in the UK since 50s of last century. Other products that are growing the fastest include frozen potato-based products, canned cola, fresh poultry and milk.
In an interview with the BBC today, Lord Rose was asked if 5.9% is the ceiling on rising prices. He replied: “I’m afraid they will climb higher and stay high for a long time.”
This came amid a rift in the cabinet over whether to target oil and gas companies for an unforeseen profit tax while prices are high and consumers are suffering.
Labor is pushing for a move, and last week Chancellor Rishi Sunak said he could “seek” a new tax again as a way to help reduce prices.
But business secretary Kwasi Kwarteng said a new tax would be a “demotiva” for investment.
Mr Kwarteng did not rule out that the move could be seen by the government as a measure to alleviate the cost of living crisis. But he told Sky’s Sophy Ridge on Sunday: “I’ve never been a proponent of contingency taxes – I’ve been very clear about that in public. I think they discourage investment.
Tory’s peer Lord Rose said the sharp rise in raw material costs will reach a new, consistently high level, which will have an impact on the trails.
The chancellor has signaled that he will “look again” at the penalty fee, as he is under pressure to act against the current cost of living crisis, which includes a huge increase in the cost of heating and feeding homes.
But today, Business Secretary Quasi Quarteng voiced strong opposition, saying a new tax would “demotivate” investment.
And he said on the BBC’s Sunday Morning show that “it doesn’t make much sense for me to hit them (energy companies) with an unforeseen tax that is random and unexpected.”
“I do not think this is the right way, but I would say it is not for me. This is for the financial chancellor, he said.
Instead, Mr Kwarteng was trying to pressure the North Sea oil and gas companies to reinvest their profits, so no more drastic action is needed.
He wrote to the industry asking for a “very clear plan” to spend profits to speed up local production and clean energy before a meeting in the coming weeks.
Mr Quarteng told the sector that investing in domestic energy production was essential for the growth of the British economy and “crucial for reducing consumer bills in the long run”.
Labor said the government was “worried” because oil and gas producers were making “growing profits” as bills grew.
Meanwhile, there were warnings today that cheap chicken may soon be a thing of the past – as the price of poultry will skyrocket in the coming months.
Marks & Spencer now retails organic chicken breasts and organic beef rump steak for £ 24.15 per kilogram.
The price of chicken meat is growing faster than any other protein due to food costs, rising energy prices and wages.
The UK’s largest chicken supplier, 2 Sisters, said 15% price inflation would be needed “to even cover the growing production costs” of poultry.
The National Statistics Office registered a 19% increase in the price of chicken meat between March 2020 and March 2022.
Chicken feed is made from soy, a by-product of sunflower oil, which has suffered huge price increases due to the war between Russia and Ukraine.
Russia and Ukraine produce a third of the world’s grain – which is used to produce oil – and both are experiencing particularly poor harvests due to the Russian invasion, which began on February 24.
Supermarkets even impose restrictions on how much cooking oil customers can buy due to supplies affected by the war in Ukraine.
Lord Rose told the BBC Sunday Morning show: “We do not know what will happen to gas prices and anything else, and it is clear that it will be dictated by how long this war lasts, but I fear there is an impact. effect for all raw materials.
“There will be a new level of costs for these raw materials and they will not fall. This is a new peak and this is something that people will have to take into account.
“What we will have to think about now is whether this will have a long-term effect on inflation, because then we will have a spiral of wages or not.
“The downside of this is that, in the end, if we don’t have business growth, we can have stagflation.
“Both are evil and the government has a very difficult and difficult way to go.”
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