Food inflation has hit its highest level in almost a year and could continue to go up, according to an industry body.

The British Retail Consortium (BRC) reported a 2.6% annual lift in food costs during April – the highest level since May last year and up from a 2.4% rate the previous month.

The body said there was a clear risk of further increases ahead due to rising costs, with the sector facing £7bn of tax increases this year due to the budget last October.

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It warned that shoppers risked paying a higher price – but separate industry figures suggested any immediate blows were being cushioned by the effects of a continuing supermarket price war.

Kantar Worldpanel, which tracks trends and prices, said spending on promotions reached its highest level this year at almost 30% of total sales over the four weeks to 20 April.

It said that price cuts, mainly through loyalty cards, helped people to make the most of the Easter holiday with almost 20% of items sold at respective market leaders Tesco and Sainsbury’s on a price match.

Its measure of wider grocery inflation rose to 3.8%, however.

Wider BRC data showed overall shop price inflation at -0.1% over the 12 months to April, with discounting largely responsible for weaker non-food goods.

But its chief executive, Helen Dickinson, said retailers were “unable to absorb” the surge in costs they were facing.

“The days of shop price deflation look numbered,” she said, as food inflation rose to its highest in 11 months, and non-food deflation eased significantly.

“Everyday essentials including bread, meat, and fish, all increased prices on the month. This comes in the same month retailers face a mountain of new employment costs in the form of higher employer National Insurance Contributions and increased NLW [national living wage],” she added.

While retail sales growth has proved somewhat resilient this year, it is believed big rises to household bills in April – from things like inflation-busting water, energy and council tax bills – will bite and continue to keep a lid on major purchases.

Also pressing on both consumer and business sentiment is Donald Trump’s trade war – threatening further costs and hits to economic growth ahead.

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A further BRC survey, also published on Tuesday, showed more than half of human resources directors expect to reduce hiring due to the government’s planned Employment Rights Bill.

The bill, which proposes protections for millions of workers including guaranteed minimum hours, greater hurdles for sacking new staff and increased sick pay, is currently being debated in parliament.

The BRC said one of the biggest concerns was that guaranteed minimum hours rules would hit part-time roles.

On the outskirts of Ho Chi Minh City, factory workers at Dony Garment have been working overtime for weeks.

Ever since Donald Trump announced a whopping 46% trade tariff on Vietnam, they’ve been preparing for the worst.

They’re rushing through orders to clients in three separate states in America.

Sewing machines buzz with the sound of frantic efforts to do whatever they can before Mr Trump’s big decision day. He may have put his “Liberation Day” tariffs on pause for 90 days, but no one in this factory is taking anything for granted.

Workers like Do Thi Anh are feeling the pressure.

“I have two children to raise. If the tariffs are too high, the US will buy fewer things. I’ll earn less money and I won’t be able to support my children either. Luckily here our boss has a good vision,” she tells me.

That vision was crafted back in 2021. When COVID struck, they started to look at diversifying their market.

Previously they used to export 40% of their garments to America. Now it’s closer to 20%.

The cheery-looking owner of the firm, Pham Quang Anh, tells me with a resilient smile: “We see it as dangerous to depend on one or two markets. So, we had to lose profit and spend on marketing for other markets.”

That foresight could pay off in the months to come. But others are in a far more vulnerable state.

Some of Mr Pham’s colleagues in the industry export all their garments to America. If the 46% tariff is enforced, it could destroy their businesses.

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Doubts US will start making what Vietnam delivers

Down by the Saigon River, young couples watch on as sunset falls between the glimmering skyscrapers that stand as a testament to Vietnam’s miracle growth.

Cuong, an affluent-looking man who works in finance, questions the logic and likelihood that America will start making what Vietnam has spent years developing the labour, skills and supply chains to reliably deliver.

“The United States’ GDP is so high. It’s the largest in the world right now. What’s the point in trying to get jobs from developing countries like Vietnam and other Asian nations? It’s unnecessary,” he tells me.

But the Trump administration claims China is using Vietnam to illegally circumvent tariffs, putting “Made in Vietnam” labels on Chinese products.

There’s no easy way to assess that claim. But market watchers believe Vietnam does need to signal its willingness to crack down on so-called “trans-shipments” if it wants to cut a deal with Washington.

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Vietnam can’t afford to alienate China

The US may also demand a major cutback in Chinese manufacturing in Vietnam.

That will be a much harder deal to strike. Vietnam can’t afford to alienate its big brother.

Luke Treloar, head of strategy at KPMG in Vietnam, is however cautiously optimistic.

“If Vietnam goes into these trade talks saying we will be a reliable manufacturer of the core products you need and the core products America wants to sell, the outcome could be good,” he says.

But the key question is just how much influence China will have on Vietnamese negotiators.

Anything above 10-20% tariffs would be intensively challenging

This moment is a huge test of Vietnam’s resilience.

Anything like 46% tariffs would be ruinous. Analysts say 10-20% would be survivable. Anything above, intensely challenging.

But this looming threat is also an opportunity for Vietnam to negotiate and grow. Not, though, without some very testing concessions.

The government is being urged to end the “absolute scandal” of new homes being built without solar panels.

Doing so would cut both household bills and greenhouse gases that cause climate change, the Local Government Association (LGA) said in a new report.

Just four in 10 new homes in England come with solar power, according to separate figures from the industry body Solar Energy UK.

Although that is a significant three-fold increase over the space of a year, the LGA said making it mandatory would benefit bill-payers and the climate for years to come, saving people £440 per year.

The UK lags behind its neighbours in the European Union, which last year adopted new legislation demanding all new residential buildings come with solar panels from 2030.

Greenpeace UK called it an “absolute scandal that homes are built without rooftop solar panels in this day and age”.

Its campaigner, Lily Rose Ellis, said: “Given the soaring cost of electricity, our desperate need to cut planet-heating emissions, and the relatively low cost of installation to housebuilders, solar panels on all new builds should be mandatory.”

Last year, Labour promised a “rooftop revolution” that would see millions more homes fitted with solar panels.

But they have been accused of wavering over proposals to make it mandatory, as it also courts the house-building industry to help it meet its target to build 1.5 million homes during this parliament.

The LGA wants the government to allocate them long-term funding in the upcoming spending review so they can help the country meet net zero.

A spokesperson for the Ministry of Housing, Communities and Local Government said they plan to “maximise the installation of solar panels on new homes” in its long-delayed new regulations, the Future Homes Standard, due later this year.

The Home Builders Federation said “Moving forward, to meet the ever more challenging carbon reductions set by government, we will see solar on the overwhelming majority of new homes, albeit it is not appropriate in every situation.”

Pylon rows

The push on solar power is part of the government’s broader plans to ensure all the UK’s electricity comes from green sources by 2030.

Electricity demand is also growing as the country switches to electric cars and heating, and builds more data centres.

All this requires more wind and solar farms, as well as 1,000 kilometres of new cables to carry the electricity from where it is generated – often a wind farm in the North Sea – to where it is used in urban areas far away.

In parts of the country like East Anglia, a row has been simmering over whether to run those cables overhead on pylons or, to protect countryside views, underground.

A hefty new report by the Institution of Engineering and Technology today weighed in on the debate, finding underground cables are on average 4.5 times more expensive than overhead lines.

Liam Hardy, head of research at thinktank Green Alliance, said: “Those costs need to go somewhere. They go on to all of our electricity bills. And of course, it’s the poorest in society for whom those bills make up a bigger percentage of their income.

He added: “What they want to see is value for money as we build out that clean infrastructure that we need.”

The government has promised communities disrupted by the new infrastructure that they should reap some of the benefits, including giving households near new pylons £2,500 off their energy bills over 10 years.