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Retailers and supermarkets are already felling an “upward pressure” even before the Budget measures kick in.
Retailers are facing mounting pressures from the government’s Budget and the cost of Christmas dinner will £50 for families.
According to the latest British Retail Consortium-NielsenIQ Shop Price Index, in November the 17 months of falling prices in shops cam to an end because of the Budget.
Food inflation sits at 1.8% due to poor harvests this year with crops being drowned in the rain along with increased winter import costs.
Consumers have been warned by the British Retail Consortium there is “significant price pressures” are set to hit.
Julian Jessop, fellow at the Institute of Economic Affairs, warned: “These figures are worrying because they show shops are beginning to feel upward pressure and this is even before the Budget measures kick in.
“Once the impact of the national insurance increases are felt from April then the impact will be greater and the costs will inevitably get passed on to the consumer.”
Shadow business secretary Andrew Griffith said, “British businesses are suffering and it is now consumers who are picking up the tab for Labour’s budget mess.”
He added, “This should come as no surprise after their summer of trash talking down the economy, handing billions to their union paymasters and raising taxes to record levels.”
Rain Newton-Smith, chief executive of the CBI said, “The rise in national insurance, the stark lowering of the threshold, caught us all off guard.
“Along with the expansion and the rise of the National Living Wage – which everyone wants to accommodate – and the potential cost of the Employment Rights Bill, they put a heavy burden on business.”
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