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"Fuel or Food" Crisis Looms: Food Foundation

Food crisis

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Increases in fuel and food prices mean people will have to choose between eating and heating in the coming months and this will likely be worse for households with children, says the Food Foundation.

The findings come as the UK's energy cap is raised this October, and given an ongoing surge in global wholesale gas prices a similar hike is expected to passed by Ofgem in February and implemented in April.

Energy bills are expected to rise when the cap is increased by 12% on Monday.

According to the Food Foundation, 64% of households with children on pre-payment meters report that in order to afford their energy bills they are at risk of having to buy less food and 80% at risk of having to buy cheaper food.

55% of households with children are meanwhile found to be worried their children’s health and wellbeing will be affected in the context of these rises.

"The choice will be stark – put money in the metre or buy food. In the past year, 73% of households with children on prepayment meters report having had to cut back on food spending to pay their energy bills," says a report from the Food Foundation.

They find 80% of respondents reported that they would consider cutting back food spending further in the context of the fuel price rises.

Food prices are also likely to start rising as a result of the knock-on effects of the HGV crisis, labour shortages especially in the hospitality sector, rises in prices of carbon dioxide and increases in world food prices.

David Sables, the chief executive of Sentinel Management Consultants, which advises suppliers in their dealings with UK supermarkets, has had an unprecedented number of inquiries from clients planning cost-price increases.

He says UK supermarket prices are likely to rise by 5%. (Resource: Morrisons offers this week).

In addition to supply constraints, the ending of furlough on September 30 means nearly a million people will see incomes fall unless they return to their old jobs or slip into a new role.

Households on Universal Credit will meanwhile see a £20/week cut to their household income.

The Bank of England earlier this week warned that inflation looked set to breach their upwardly revised 4.0% peak in the final quarter of the year, and given that supply-side shortages look increasingly entrenched inflation is now expected to remain elevated through early 2022.

"We need the Government to get ahead of this crisis before winter sets in when the consequences become much more serious. Government needs to U-turn on the Universal Credit cut and establish a minimum nutritional safety net so that at risk children get at least one decent meal a day," says Anna Taylor, Executive Director of Food Foundation.