Rachel Reeves' tax raid on businesses is hitting households at the supermarket till, the Bank of England said.
Hikes in National Insurance contributions (NICs) and the minimum wage were contributing to shoppers paying more for their food, the Bank said – and warned the situation will likely get worse.
Food inflation hit 4.5 per cent in June, higher than economists had forecast in May, and is expected to peak at 5.5 per cent next month.
Retail industry leaders warned that grocery inflation will accelerate even further if the Chancellor pushes ahead with tax hikes in the Autumn Budget.
And the Bank flagged that Deputy Prime Minister Angela Rayner's upcoming Workers' Rights Bill had piled more uncertainty on businesses.
