Britain's food sector hit hardest by rocketing energy costs

[LONDON] The UK's food and drink industry is suffering more from soaring energy and raw material costs than any other business group, according to the Office for National Statistics.

More than two-thirds of the country's food and beverage companies said prices of materials, goods or services rose in March, compared with about half for businesses across all sectors, the statistics office said in its Business Insights and Conditions Survey. Energy price increases affected 60 per cent of those in the food and drink industry, versus about 38 per cent across all sectors.

The report highlights the challenge confronting policymakers, with the economy set for a period of "stagflation" - rapidly rising prices and slow growth. Soaring food and energy prices threaten to push UK inflation into double digits this year, adding to pressure on Chancellor of the Exchequer Rishi Sunak and the Bank of England to act.

This data comes as food costs increase worldwide due to the war in Ukraine, which has disrupted production and exports from one of the biggest suppliers of wheat, corn and vegetable oil. Natural gas and electricity prices have also increased drastically due to Europe's reliance on imports from Russia.

Only 3 per cent of food and beverage companies said they hadn't been affected by prices, compared with 20 per cent across all businesses, according to the survey. BLOOMBERG