The Food and Drink Federation warns UK food inflation could hit 9% as costs soar amid global conflicts and rising oil prices.
The conflict in the Middle East has caused oil prices to spike past $90 a barrel, the highest since 2024, driven by threats to supply routes and production halts. Markets fear prolonged disruption will fuel inflation, impact energy costs, and threaten economic stability globally, especially in the UK and Europe.
The UK is bracing for a sharp rise in food inflation, projected to reach at least 9% in 2026, driven by energy supply disruptions from the Middle East conflict. Governments and businesses are discussing measures to mitigate the impact on consumers and supply chains.
British manufacturers will pay an extra £940 million annually due to new business rates changes, which disproportionately impact large factories. The government increased rates in November, with some relief for pubs and venues. Industry groups warn this will threaten manufacturing sectors already strained by energy costs and geopolitical tensions.
Retail crime, rising energy costs, and geopolitical tensions are impacting UK retailers. Despite efforts to control prices, companies report increased costs and uncertain profits. The government is responding with police recruitment and legislation to address retail crime, while energy and supply chain issues continue to challenge the sector.