Grocery inflation hits new record high – and the worst is yet to come

Published

2 years ago

March 28, 2023

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UK grocery inflation has hit a new record high – with customers now paying hundreds more a year – but there are warnings the worst is yet to come.

As inflation for food hits 17.5%, Kantar Worldpanel reported households are now facing a potential £837 hike in the annual cost of their regular basket – although consumers are increasingly shopping around in a bid to find the best value.

Its latest report said footfall was up in “every single grocer” over the four weeks to March 19, with households now visiting three or more of the top 10 retailers per month on average – with chains “battling it out” to get buyers through their doors.

But amid concerns over the impact of salad shortages in some UK supermarkets, Kantar said shoppers had instead turned to independents to plug any gaps in availability.

Its head of retail and consumer insight, Fraser McKevitt, said: “Despite concerns about shortages, the number of baskets containing tomatoes, cucumbers or peppers in the 10 major grocers stayed at 17% in March, the same as February.

“For any shoppers who couldn’t get what they wanted in larger supermarkets, the independents stepped in, with the volumes of tomatoes, peppers and cucumbers in baskets rising by 32%, 26% and 21% respectively in these stores.”

‘The worst is yet to come’

Shop prices are now 8.9% higher than they were a year ago, up from February’s 8.4% increase, according to the British Retail Consortium (BRC)-NielsenIQ index.

The rising cost of sugar, coupled with high manufacturing costs, has contributed to price rises for chocolate, sweets and fizzy drinks. Fruit and vegetable prices have also risen as poor harvests in Europe and North Africa limited availability.

But there are warnings the UK has not seen the worst of the surging prices.

BRC chief executive Helen Dickinson said: “Shop price inflation has yet to peak.

“Food price rises will likely ease in the coming months, particularly as we enter the UK growing season, but wider inflation is expected to remain high.”

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Mike Watkins, head of retailer and business insight at NielsenIQ, said: “Inflation continues to have an impact on the spending power of shoppers and increased energy bills from April will add more pressure.”

“Since food prices have risen retailers have seen more visits but less basket spend, as shoppers manage their weekly food bills by shopping little and more often and seeking out the lowest prices.

“And as Easter approaches some high street retailers will also be offering discounts and promotions to encourage customers to spend.”

The fastest-growing supermarkets

Mr McKevitt said shoppers were increasingly taking advantage of store loyalty cards, with nine in ten consumers having one in their wallet, while shoppers are also picking more own-label lines, sales of which are up by 15.8% during the period compared to last year.

But he added: “People are keeping some space in their baskets for the brands they know and love. Outside the discounters Aldi and Lidl, branded goods still make up 52% of the market and sales grew by 7.2% over the past month, the fastest rate we’ve seen since February 2021.

Kantar said Lidl was the fastest growing supermarket with sales rising by 25.8%, earning it a market share of 7.4%.

Tesco remains Britain’s largest grocer with a 26.9% share of the market, while Sainsbury’s is on 14.8% and Asda 14.3%, according to the data.

Business

US trade war: The state of play as Trump signs order imposing new tariffs – but there are more delays

Published

12 hours ago

August 1, 2025

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US trade war: The state of play as Trump signs order imposing new tariffs - but there are more delays

Donald Trump’s trade war has been difficult to keep up with, to put it mildly.

For all the threats and bluster of the US election campaign last year to the on-off implementation of trade tariffs – and more threats – since he returned to the White House in January, the president‘s protectionist agenda has been haphazard.

Trading partners, export-focused firms, customs agents and even his own trade team have had a lot on their plates as deadlines were imposed – and then retracted – and the tariff numbers tinkered.

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While the UK was the first country to secure a truce of sorts, described as a “deal”, the vast majority of nations have failed to secure any agreement.

Deal or no deal, no country is on better trading terms with the United States than it was when Trump 2.0 began.

Here, we examine what nations and blocs are on the hook for, and the potential consequences, as Mr Trump’s suspended “reciprocal” tariffs prepare to take effect. That will now not happen until 7 August.

Why was 1 August such an important date?

To understand the present day, we must first wind the clock back to early April.

Then, Mr Trump proudly showed off a board in the White House Rose Garden containing a list of countries and the tariffs they would immediately face in retaliation for the rates they impose on US-made goods. He called it “liberation day”.

The tariff numbers were big and financial markets took fright.

Just days later, the president announced a 90-day pause in those rates for all countries except China, to allow for negotiations.

The initial deadline of 9 July was then extended again to 1 August. Late on 31 July, Mr Trump signed the executive order but said that the tariff rates would not kick in for seven additional days to allow for the orders to be fully communicated.

Since April, only eight countries or trading blocs have agreed “deals” to limit the reciprocal tariffs and – in some cases – sectoral tariffs already in place.

Who has agreed a deal over the past 120 days?

The UK, Japan, Indonesia, the European Union and South Korea are among the eight to be facing lower rates than had been threatened back in April.

China has not really done a deal but it is no longer facing punitive tariffs above 100%.

Its decision to retaliate against US levies prompted a truce level to be agreed between the pair, pending further talks.

There’s a backlash against the EU over its deal, with many national leaders accusing the European Commission of giving in too easily. A broad 15% rate is to apply, down from the threatened 30%, while the bloc has also committed to US investment and to pay for US-produced natural gas.

Where does the UK stand?

We’ve already mentioned that the UK was the first to avert the worst of what was threatened.

While a 10% baseline tariff covers the vast majority of the goods we send to the US, aerospace products are exempt.

Our steel sector has not been subjected to Trump’s 50% tariffs and has been facing down a 25% rate. The government announced on Thursday that it would not apply under the terms of a quota system.

UK car exports were on a 25% rate until the end of June when the deal agreed in May took that down to 10% under a similar quota arrangement that exempts the first 100,000 cars from a levy.

Who has not done a deal?

Canada is among the big names facing a 35% baseline tariff rate. That is up from 25% and covers all goods not subject to a US-Mexico-Canada trade agreement that involves rules of origin.

America is its biggest export market and it has long been in Trump’s sights.

Mexico, another country deeply ingrained in the US supply chain, is facing a 30% rate but has been given an extra 90 days to secure a deal.

Brazil is facing a 50% rate. For India, it’s 25%.

What are the consequences?

This is where it all gets a bit woolly – for good reasons.

The trade war is unprecedented in scale, given the global nature of modern business.

It takes time for official statistics to catch up, especially when tariff rates chop and change so much.

Any duties on exports to the United States are a threat to company sales and economic growth alike – in both the US and the rest of the world. Many carmakers, for example, have refused to offer guidance on their outlooks for revenue and profits.

Apple warned on Thursday night that US tariffs would add $1.1bn of costs in the three months to September alone.

Barriers to business are never good but the International Monetary Fund earlier this week raised its forecast for global economic growth this year from 2.8% to 3%.

Some of that increase can be explained by the deals involving major economies, including Japan, the EU and UK.

US growth figures have been skewed by the rush to beat import tariffs.

The big risk ahead?

It’s a self-inflicted wound.

The elephant in the room is inflation. Countries imposing duties on their imports force the recipient of those goods to foot the additional bill. Do the buyers swallow it or pass it on?

The latest US data contained strong evidence that tariff charges were now making their way down the country’s supply chains, threatening to squeeze American consumers in the months ahead.

It’s why the US central bank has been refusing demands from Mr Trump to cut interest rates. You don’t slow the pace of price rises by making borrowing costs cheaper.

A prolonged period of higher inflation would not go down well with US businesses or voters. It’s why financial markets have followed a recent trend known as TACO, helping stock markets remain at record levels.

The belief is that Trump always chickens out. He may have to back down if inflation takes off.

Business

Trump’s tariffs are back – here’s who is in his sights this time

Published

15 hours ago

August 1, 2025

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'A BIG DAY FOR AMERICA!!!' - Trump's tariffs are back, and will affect dozens of countries

It is “Liberation Day” III – the third tariff deadline set by Donald Trump.

Countries without bilateral trade agreements will soon face reciprocal tariffs – ranging from 25% to 50% – with a baseline of 15% to 20% for any not making a deal.

He has delayed twice, from April to July and from July to August, but hammered this date home in his trademark caps-on style: “THE AUGUST FIRST DEADLINE STANDS STRONG, AND WILL NOT BE EXTENDED. A BIG DAY FOR AMERICA!!!”

“Will not be extended” for anyone but Mexico, it seems. The country secured a 90-day extension at the last minute, with Mr Trump citing the “complexities” of the border.

By close of business on the eve of deadline, he had a handful of framework deals – some significant – including the UK (10%), the EU, Japan and South Korea (15%), Indonesia and the Philippines (19%), Vietnam (20%).

On the EU agreement, which he struck in Scotland, the president said: “It’s a very powerful deal, it’s a big deal, it’s the biggest of all the deals.”

But what happened to the “90 deals in 90 days” touted by the White House earlier this year?

The short answer is they were replaced by letters of instruction to pay a tariff set by the US.

Amid of flurry of late activity, the US played hardball with major trading partners like Canada.

“For the rest of the world, we’re going to have things done by Friday,” said US Commerce Secretary Howard Lutnick – the “rest of the world” meaning everyone but China.

There is, apparently, the “framework of a deal” between the world’s two largest economies, but talks between Washington and Beijing are continuing.

In terms of wins, he can claim some significant deals and point to his tariffs having generated an impressive $27bn (£20.4bn) in June, not bad for a single month.

But the legality of the approach is under siege – with the US Court of International Trade ruling that the “Liberation Day” tariffs exceeded the president’s authority, with enforcement paused pending appeal.

The deadline has stirred the pot, forcing a handful of deals onto the table. Whether they stick or survive legal scrutiny is far from settled.

But the playbook remains the same – threaten the world with trade chaos, whittle it down, celebrate the wins, and pray no one checks what’s legal.

Business

Microsoft is now worth over $4 trn, becoming only second firm ever to pass milestone

Published

1 day ago

July 31, 2025

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Microsoft has become only the second publicly traded company after Nvidia to surpass $4 trn (£3.03trn) in market valuation, after registering huge earnings.

On Thursday, shares rose on Wall Street with the S&P 500 and Nasdaq climbing to new record highs.

Stocks in Microsoft jumped after posting better-than-expected results, helped by its Azure cloud computing platform, which is a centrepiece of the company’s artificial intelligence (AI) efforts.

Shares in Facebook and Instagram’s parent company, Meta, also surged after beating sales and profit targets.

Technology giants Apple and Amazon will report their results after Wall Street’s close.

Microsoft first cracked the $1trn (£760bn) mark in April 2019, but its move to $3trn (£2.27trn) took longer than technology giants Nvidia and Apple.

Nvidia tripled its value in just about a year and clinched the $4trn milestone before any other company on 9 July. Apple was last valued at $3.12trn.

In comparison, the biggest UK company by market value is drug manufacturer AstraZeneca, worth $235.97bn (£178.55bn).

Companies ranked by market value (USD), according to tradingview.com

1. Nvidia (US) $4.43trn
2. Microsoft (US) $4trn
3. Apple (US) $3.12trn
4. Amazon (US) $2.47trn
5. Alphabet (US) $2.35trn
6. Meta (US) $1.95trn
7. Saudi Arabian Oil (Saudi Arabia) $1.56trn
8. Broadcom (US) $1.42trn
9. Berkshire Hathaway (US) $1.03trn
10. Tesla (US) $1.02trn
11. Taiwan Semiconductor Manufacturing (Taiwan) $1trn
29. Samsung Electronics (South Korea) $338.06bn
36. Alibaba (China) $284.62bn
52. AstraZeneca (UK) $235.97bn

While sweeping US tariffs had investors worried about tighter business spending, Microsoft’s strong earnings have shown that the company’s books are yet to take a hit.

Microsoft’s multibillion-dollar bet on OpenAI is proving to be a game changer, powering its Office Suite and Azure offerings with cutting-edge AI and fueling the stock to more than double its value since ChatGPT’s late-2022 debut.