A recent analysis by the British Retail Consortium (BRC) has revealed that food prices may rise by 4.2% in the latter half of 2025.
Responding to this, a Lib Dem Deputy Leader Daisy Cooper said that the potential for households to face higher food costs is “incredibly worrying” and has come as a “hammer blow” to households already struggling with “stretched budgets”.
She went on to say that “the new government is faced with the enormous challenge of cleaning up the Conservative Party’s economic vandalism, but their approach so far risks repeating more mistakes”.
According to a HM treasury spokesperson: “Food inflation has fallen from a peak of 19.6% under the previous government to just 1.9%”.
They go on to explain that: “With our public services crumbling and an inherited £22bn fiscal black hole from the previous government, we had to make difficult choices to fix the foundations of the country and restore desperately needed economic stability to allow businesses to thrive”.
The BRC have claimed that the industry is facing a £7 billion increase in costs following national insurance, minimum wage, and a new packaging levy.
National insurance rates are set to rise for businesses from 13.8% to 15%, while the threshold for payments will be reduced from £9,100 to £5,000.
The National Minimum Wage for over-21s will increase 6.7%, while the National Minimum Wage, paid to 18-20 year olds, will see a 16% rise.
Additionally, higher charges will be placed on the use of plastic packaging. There are different fees for different types of plastic with the highest fee being £485.
The BRC have said: “For an industry that already operates on slim margins, these new costs will inevitably lead to higher prices”.
The Liberal Democrats argue that “this news will come as a hammer blow to families across the country. Millions of people are already having to choose between heating and eating”.
The Treasury responded saying: ““To immediately support to the sector, we are already providing 40% business rates relief next year, and are introducing a permanent, new lower business rate from 2026, marking the start of our reforms to business rates” and that they are “focused on putting more money in people’s pockets by growing the economy as part of our Plan for Change”.
Additionally, they cite an independent Office for Budget Responsibility review which indicates food inflation will remain below 2.2% this year.
However, the Liberal Democrats have called for the changes to be scrapped saying: “It’s now clear as day that the Chancellor’s misguided national insurance hike is only going to hammer household budgets further by forcing up prices. Ministers must recognise their error and scrap this tax hike immediately”.
