Food price rises ‘to hit UK hard’

The UK is “more exposed” to rising food price rises than its peers, adding to recessionary fears, according to a report by Ernst & Young.

Its Item Club says “the implications for business are profound” – making it more likely firms will raise prices.

Unlike the US which has a balance of food and France which has a surplus, the UK has a trade deficit in food.

World food prices have risen due to population growth and poor climate in the major cereal producing nations.

Another factor is a growth in the production of biofuels, as crops are being turned into energy rather than food for humans, the report states.