UK food inflation ‘could hit 9%’, trade body warns as Reeves meets retail chiefs
Food inflation could hit 9% in the UK this year even if the strait of Hormuz opens within the next few weeks, figures suggest, as the Iran war pushes up energy prices.The Food and Drink Federation (FDF), which represents 12,000 food and drink manufacturers, has predicted prices will rise by “at least” 9% by the end of 2026, almost tripling a forecast of 3.2% that was made before the Middle East conflict.The chancellor, Rachel Reeves, met supermarket bosses on Wednesday to discuss how to ease any impact of cost inflation on prices at the till, while global markets rallied on remarks from Donald Trump suggesting the war could end in “two to three weeks”.The FTSE 100 shut 1.
8% higher on Wednesday, its biggest one-day gain in almost a year.Oil fell as low as $98.35 a barrel at one point, its lowest level in a week, before returning to nearer $102.Dr Liliana Danila, the chief economist at the FDF, said the industry was already facing big rises in energy, transport and packaging costs, as well as disruptions across its supply chains.“The current situation is unprecedented and hard to predict,” she said.
“Given the scale and speed of these cost increases, and despite companies’ best efforts not to pass price increases on, it’s clear that food inflation is going to rise in the months ahead.”The 9% forecast assumes that the strait of Hormuz, a key shipping channel, will reopen to cargo traffic within the next two to three weeks, and the majority of large energy facilities, such as oil, gas and fertiliser sites, return to normal within a year.Retailers including the bosses of Tesco, Sainsbury’s, Morrisons, Marks & Spencer, Aldi and Lidl met Reeves and the environment secretary, Emma Reynolds, at No 11 Downing Street on Wednesday.They are understood to have asked the chancellor to take action to ease cost pressures, with help on energy bills and a delay on new regulatory fees or adjustments such as on packaging, unhealthy food and employment rights.A government spokesperson said it was a “positive meeting” and businesses and ministers had “agreed to work together to explore what more can be done to ease the cost of living for consumers and strengthen supply chains”.
One attender said the meeting had been “very constructive”, adding that the government had been particularly willing to try to find ways to help with energy bills as “this runs through the whole supply chain”.UK farmers and producers have said that without government help with surging energy bills there could be shortages of domestic tomatoes, cucumbers, peppers and aubergines.Growers’ representatives have said that without support from ministers, or the retailers they supply, fresh produce businesses could go bust later this year as higher costs bite.Simon Conway, the chair of the British Tomato Growers’ Association (BGTA), said: “Growers historically only make money in the last few weeks of the season, as margins are so tiny in this sector.No one can absorb these kind of cost shocks, they have to be worked through with retailers.
”Many businesses, which typically fix their energy contracts from April, will be hit by a sharp rise in costs from Wednesday amid increases in standing charges, the fixed daily cost added to bills for accessing the UK’s gas and electricity network.The BTGA and other food producers are campaigning to be classed as “energy intensive users” by the government, a classification that would help to reduce their bills.If there is no support, “businesses will fail”, said Conway.Energy bills are just one extra cost facing food producers, along with higher prices for packaging and the fuel needed to transport goods to retailers.The effect of a string of cost increases “hasn’t hit yet but is coming towards the end of the summer”, said Conway.
He added that retailers remembered the gaps on shelves in early 2023, when there were fresh produce shortages.Meanwhile, household energy bills are due to fall until July, but are then expected to jump.The government is coming under increasing pressure to provide support on higher energy bills, although so far it has suggested that any help would be targeted for the most vulnerable households.In an interview with the BBC, Reeves said the government was looking at ways in which it could support people based on their household income.However, she did not commit to cutting fuel duty or VAT on petrol, saying she had to be careful with promises to lower prices too much as it could then push up overall inflation, interest rates and taxes.
‘From high flyer to dead parrot’: former billion-dollar eco-shoe brand Allbirds sold for $39m
Allbirds, the San Francisco sustainable trainer brand once valued at more than $4bn, is being sold for just $39m (£29.6m) after global demand for its wool-based footwear failed to materialise.American Exchange Group, the owner of a string of brands including the fashion label Ed Hardy and the accessories maker Born, is snapping up the struggling company once touted as the future of footwear.Allbirds listed on the US stock market in 2021, but its shares have since tumbled by more than 99%, leaving it valued at just over $20m.In its early years, the brand enjoyed rapid success, and in the first two years since its official launch in March 2016, Allbirds sold more than 1m pairs of its original merino wool trainers
‘If he’d stayed on the golf course, we’d be in a better place’: experts on Trump’s tariffs, one year on
Before Donald Trump declared “liberation day” on 2 April 2025 and shocked the world by raising import tariffs on nearly every country the US did business with, he had spent almost three months causing chaos in Washington.The wholesale slashing of government jobs under Doge (the “department of government efficiency”) and the defunding of US aid agencies had shown White House watchers that the US president was in a hurry to upset institutions he considered profligate or useless.Investors quickly understood that chaos was an essential tool in Trump’s armoury. Almost as soon as he was inaugurated, there was a steady decline in the value of the dollar against other currencies. Investors sold assets denominated in dollars and bought assets elsewhere: Europe, Asia, South America
Secondhand clothes sales forecast to hit $289bn as AI helps shoppers find deals
Secondhand clothing sales are forecast to surge 12% this year to $289bn (£217bn) and continue to step up, as AI and social media influencers help shoppers find the items they want.The rise of sites such as Vinted, Depop, Vestige and ThredUp is expected to power an average 9% annual growth over the next five years to reach $393bn, twice the pace of the overall clothing market.The prediction came in ThredUp’s annual resale report, which uses research from market analysts GlobalData. In 2021 the market was worth just $141bn, less than half this year’s expected total.Brands such as Dr Martens, Zara and Mulberry have begun selling their own secondhand items or repairing and reviving used items as demand booms
Thames Water ‘close to deal that would spare it new Ofwat fines until 2030’
Thames Water is said to be close to a deal with its regulator that would allow the company to avoid new fines for four years, as long as it commits to investing in the business.The controversial offer, reported by the Financial Times, has been put forward by creditors who are hoping to save the struggling utility from being temporarily renationalised.Thames has been trying to stave off financial collapse for more than two years, after building up a £17.6bn debt pile in the decades after its privatisation. Bosses tried to sell the company last year but faced embarrassment when their preferred bidder, KKR, pulled out of the deal at the last minute
Larva lamped: Colin the Caterpillar loses to eight lookalikes in cake taste test
After a busy 35 years as a British party favourite, not to mention a bruising court battle with an alleged copycat, you might think Colin the Caterpillar had earned his place at the top.But the “original” chocolate caterpillar cake has now been labelled the worst, bested by lookalikes in a taste test.In a contest against eight supermarket rivals including Cecil, Charlie and Wiggles, Colin came bottom with a score of 64%.Almost half (44%) of the 75-strong panel of cake-testers assembled by the consumer champion Which? complained Colin’s sponge was “too dry”. By contrast, the Waitrose progeny Cecil triumphed with 78% and was awarded a coveted “best buy” gong
Polymarket and other prediction platforms driving oil market, traders say
Online betting platforms are directly driving the global oil market as they increasingly rely on anonymous prediction markets to determine multimillion-dollar trades, energy traders have warned.Market experts have said that datafeeds from prediction platforms such as Polymarket are being used to create the algorithms that influence trading in the global Brent crude futures market.The “widespread” use of Polymarket in oil futures trading has emerged amid concerns that anonymous account holders may be using insider knowledge to place bets.Energy traders have raised concerns that the platform could also be used to influence pricing in the global oil market.One energy trader said Polymarket had become the best predictor of the oil market’s direction since the US-Israel war with Iran triggered a global oil crisis, making it an essential part of the algorithms used to determine trades
Stellantis recalls 44,000 UK vehicles over fault that could cause fires
UK firms expect to raise prices more quickly as Iran war pushes up costs
Claude’s code: Anthropic leaks source code for AI software engineering tool
SpaceX confidentially files to go public at $1.75tn, reports say
Rams star Puka Nacua in rehab amid claims of antisemitic remark and biting incident
‘From the ground up’ – How Black Country volunteers are tackling the highest levels of inactivity in England