British households face a difficult winter as cost pressures created by a shortage of couriers and bureaucracy at the borders mean more price increases are now “inevitable”, retail bosses warned. Tim Wallace writes.
The British Retail Consortium (BRC) said there were “clear signs” that the shortage of carriers combined with rising transport costs and commodity costs were beginning to trickle down to store prices.
Food price inflation returned in September for the first time in six months, according to BRC, in an early sign that supply problems are beginning to take their toll.
Products, including DIY and garden equipment, furniture and electrical appliances, are increasing especially sharply.
General store prices rose 0.1% between August and September, but are still lower compared to the same month last year.
Helen Dickinson, CEO of BRC, said: “It is inevitable that prices will continue to rise. Supply chains have been put to the test recently, with CO2 shortages and heavy vehicles.
“The government must find a long-term solution to the HGV driver shortage by expanding the size and scope of the new visa scheme for foreign drivers, so that they can fill in the gaps while training new British drivers. .
“Without this, these additional burdens on what is already a precarious business environment will affect the British consumer and the prices they pay for the goods they want and need.”
Currently, 5,000 foreign truck drivers are allowed to work in the UK under the temporary visa scheme introduced by the Government this week.
The HGV crisis has already had a ripple effect on gas stations across the UK, as a lack of drivers combined with panic buying drives gas station pumps to run dry.
Prices rose above 135 pence per liter this week, up from 113 pence a year ago and the highest level since September 2013.
Diesel has risen to nearly 138p, the highest level since early 2014.
According to a survey by the Confederation of Recruitment and Employment (REC), almost six out of 10 companies suffer from a shortage of candidates for vacant positions.
For those looking for permanent staff, 13% have a driver shortage, and 17% of companies need temporary workers.
Neil Carberry, executive director of REC, said the solution to solving the driver shortage was more complex than simply relaxing visa rules.
He said: “Yes, we need a visa system that responds to the needs of the economy, but the answers to this lie in policies that will take a long time to materialize.”
This should include “addressing youth unemployment by providing opportunities for the jobs that we are seeing in short supply,” he added.
5 things to start the day
1) The pound plummets on rising inflation and the US debt crisis. The British pound slips and the FTSE 250 falls 2% after the cost of government borrowing hit 1% for the first time since March 2020 due to rate hike fears.
2) Stelios loses control of easyJet after 26 years Sir Stelios and his family can no longer veto key airline board decisions after their stake falls to 15.3%.
3) Euan Blair worth £ 160m after his company’s record investment Multiverse valued at nearly £ 650 million after US investors invested $ 130 million in the company, a record for UK education technology.
4) BT faces court case for landline overload The telecoms giant faces the prospect of paying £ 500 to more than 2 million customers if it loses a class action lawsuit.
5) Wise shares tumble after founder fined for UK tax violation Kristo Kaarman says she is now spending more time “keeping her personal management in order.”
What happened overnight
Asian stocks fell on Wednesday as rising bond yields stoked inflation fears and the China Evergrande Group debt crisis intensified.
MSCI Inc.’s Asian Stocks gauge had the biggest drop in nearly six weeks, heading for its first quarterly decline in six. Japan fell when two candidates participated in a runoff for the ruling party leader. China slipped by the deepening debt crisis at China Evergrande Group.
US futures rose after the S&P 500 fell further since May, and concerns about a stagnating debt ceiling in Washington added to investor distress. The Nasdaq 100 fell the most since March, as tech stocks underperformed amid rising Treasury yields. European contracts went up. Treasuries stabilized after the yield on the 30-year note rose nearly 10 basis points. Oil fell and the dollar fell.
Going up today
- Corporate: Ashmore, gender (Whole year); Berkeley (Commercial update)
- Economic Sciences: PMI services (UNITED KINGDOM), retail sales (I), unemployment rate (U.S), services and composite PMI (US, US)