Warning of ‘substantial’ food price hikes this year

We use your sign-up to provide content in ways you’ve consented to and to improve our understanding of you. This may include adverts from us and 3rd parties based on our understanding. You can unsubscribe at any time. More info

Average energy bills for the typical household are set to go up again in April as well as water bills. These extra costs will also affect food and drink providers with the potential for this to be reflected in even higher prices for consumers.

James Longley, managing director at Utility Bidder, spoke about how April’s energy and water bill increases will affect businesses and consumers.

Energy bills will go up in April as the instalments of the £400 energy bills discount comes to an end in England, Scotland and Wales.

Water bills are also increasing with Water UK warning bills could go up by 7.5 percent, although this will vary by region.

Mr Longley warned: “A rise in both energy and water bills across the UK is set to have a knock-on effect on the price of consumer items on the shelves – and this impact will be felt by both businesses and customers alike.”

He said retail bills for Britons are still “through the roof” despite wholesale energy prices going down.

The consumer expert explained: “This is deeply concerning for UK residents, but whilst we aren’t seeing bills go down for the foreseeable future, the cost of wholesale energy is going down for the first time since the world was engulfed in an energy crisis – largely down to the COVID-19 pandemic and conflict between Ukraine and Russia.

“Such developments aren’t likely to directly impact prices for commodities such as groceries or fuel for now, but certainly further down the line with shops already struggling to fill the shelves and grocery price inflation already at 17 percent in February.

“Grocery price inflation is an issue in the same bracket as energy prices for many Brits at this moment in time, and the fear is food and drink prices will rise substantially still throughout the year.”

Don’t miss…
TV licence fee may rise – full list of discounts [TV LICENCE]
Martin Lewis warning to ‘budget’ for energy bills increase next month [ENERGY BILLS INCREASE]
Coventry Building Society to raise interest rates [SAVINGS]

He warned food manufacturers could increase their prices by up to seven percent this year as their costs go up, and this could be passed on to consumers.

With the drop in the wholesale price of energy, the cap set by energy regulator Ofgem was recently decreased.

The new cap will come into effect from April, with an average bill of £3,280 for a typical dual fuel household paying by direct debit.

But consumers are protected from this market price by the Government’s energy price guarantee, with average bills for a typical household to stay at £2,500 a year for the next three months, as announced in the Budget this week.

Average energy bills are set to continue to decrease this year, with bills to drop below the Government guarantee in July, when average annual bills will drop to £2,165, according to figures from Investec.

Professor Adrian Palmer, head of Marketing and Reputation at Henley Business School, told Express.co.uk consumers could see further price rise despite inflation falling.

The Consumer Price Index rate of inflation peaked at 11 percent in late 2022 and dropped to 10.1 percent in January.

Mr Palmer said: “There will be some continuing pressures that could see inflation increase and prices rise even more.

“Labour intensive service industries like hospitality, retail and HGV haulage are facing staff shortages.

“If this carries on, they may only be able to attract staff by paying higher wages, and the cost of this will be passed on to customers.

“We may still face unpredictable disruptions to supply chains – shortages pushing prices up. We are currently seeing the effects of bad weather in southern Europe on vegetable prices, not helped by many UK producers cutting back production because of high energy costs.”

The academic warned this pattern could continue with more labour shortages and high energy costs, and that UK retailers may need more time to adapt their supply chains.

He warned Britons could face higher prices for electronics because of UK policy towards China. He said: “Something to watch too is the potential political isolation of China.

“At present, it is just high-tech products like 5G technology that have been banned, but if wider sanctions are imposed on imports from China, this could have a significant effect on prices of goods, especially electronics.”

Source: Read Full Article