Retailers are warning that the full impact of the Iran war will soon hit supermarket shelves, despite a slight decrease in shop price inflation to 1 per cent in April. Soaring fuel prices are expected to increase costs for farmers, which will subsequently lead to higher prices for livestock and vegetables.
Cost Pressures Mounting
Helen Dickinson of the British Retail Consortium stated that retailers are already facing significant cost pressures from domestic policies, which will be exacerbated by rising fuel, fertiliser, and commodity prices. The ongoing conflict in the Middle East has disrupted supply chains, particularly through the Strait of Hormuz, a critical chokepoint for global oil shipments.
Political Response
Sir Keir Starmer admitted that the financial pain from the conflict could be long-lasting, even after the Strait of Hormuz reopens. He urged the public not to panic, but acknowledged that households should prepare for higher costs in the coming months.
Industry Forecasts
Market research firm NIQ anticipates that increased fuel prices will drive inflation across food and non-food supply chains. The Food and Drink Federation has forecast that food inflation could reach 10 per cent by the end of the year, adding further strain to household budgets already stretched by high energy bills and other living costs.
Octopus Energy boss also outlined expectations for energy bill costs amid the Strait of Hormuz closure, warning that the energy market remains volatile and that further price increases are likely in the short term.
