Rachel Reeves Budget backlash as food prices rise | U.Okay.Finance News
Families have been dealt a contemporary financial blow as food prices jumped again with supermarkets pointing the finger at Rachel Reeves.New inflation figures show food prices rose by 4.5% within the 12 months to June, up from 4.4% the earlier month – with staples such as bread, rice and pasta seeing month-on-month will increase.The surge flies within the face of retailer claims that prices are falling within the aisles as a outcome of grocery store competitors. Critics stated the figures show there may be little aid on the checkout for struggling households.The rise in food prices got here alongside a sharper-than-expected increase in total inflation, which climbed from 3.4% to three.6% – its highest stage since January 2024.The British Retail Consortium (BRC), which represents main high road names, blamed the Chancellor’s Spring Budget and poor climate for driving up prices. They say the Budget will increase in employer National Insurance and the minimal wage have added billions to their prices.It urged Rachel Reeves to rethink plans for a business charges overhaul, warning it could solely add to the inflationary stress.Kris Hamer, Director of Insight on the BRC, stated: “While inflation has risen steadily over the last year, food inflation has seen a much more pronounced increase.“Despite fierce competition between retailers, the ongoing impact of the last budget and poor harvests caused by the extreme weather have resulted in prices for consumers rising.”The price of many staples rose on the previous month, including bread, rice and pasta though consumers in the market for chocolate benefitted from a decrease.“With rising costs already driving up prices at the till, the Chancellor must take action now to protect consumers from inflation rising further.”The proposed business rates reform would drive up costs for many high street stores, limiting investment and pushing up prices for everyone.”If the Government wants to support households and high streets, they should ensure that no shop pays more as a result of these changes.”The figures had been branded “a disappointment” for thousands and thousands of households hoping to see prices come down after months of hardship.Anna Leach, Chief Economist on the Institute of Directors, warned that the information raised the spectre of stagflation.“With inflation still proving sticky and economic growth stagnating, the UK is skirting the edges of stagflation… The MPC will want clear signs that wage growth is moderating, and second-round inflationary effects are fading, before it can cut rates with confidence.”The latest figures have fuelled a growing backlash over the Government’s financial plans, with some warning that customers are being misled over supposed “cuts” on the cabinets.Rachel Reeves, who has pledged to get a grip on inflation, is now underneath stress to behave swiftly to help rein in prices – and keep away from sabotaging the Bank of England’s path to reducing charges.Matt Swannell, Chief Economic Advisor to the EY ITEM Club, stated there may be nonetheless hope the Bank may cut charges in August – however warned that progress is proving painfully gradual.He stated: “Headline inflation is expected to edge up over the next few months and peak in September… There doesn’t seem to be enough in these inflation numbers to derail an interest rate cut in August.”But with underlying “services” inflation – the Bank of England’s most well-liked indicator – rising again, confidence in a charge cut has been shaken.
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