Chancellor Philip Hammond’s budget should protect the “bedrock” of the UK food industry, says the National Farmers Union (NFU), while business leaders urged him to help the nation “grow its way out of austerity”.
Three-month average pay settlements in the manufacturing sector have risen above 2% for the first time since November 2015, according to a survey by EEF, the manufacturers’ organisation, following a surge in inflation.
Rising food prices can be expected in 2017 – reversing the deflationary trend of recent years – as news emerged from the Office for National Statistics (ONS) that inflation overall in the UK in November had climbed to its highest level in two years.
Food and drink manufacturers are still coming to terms with the budget proposal to introduce a sugar tax on soft drinks, while welcoming business rates reform but expressing disappointment on the failure to cut alcohol duties.
News that food price inflation had slowed in October gave hard-pressed shoppers some respite. Whether this will lead to greater stability in the roller coaster rise of volatile input costs for manufacturers is another matter.