'TAX RISES WILL RESULT IN HIGHER FOOD PRICES'

THE Chancellor has been warned food bills will soar even faster if she ploughs ahead with punishing tax hikes on retailers.

- By Martyn Brown Political Editor

Supermarket chiefs have written to Rachel Reeves before her Budget to say households would inevitably be hit in the pocket by rises.

Tesco, Asda, Sainsbury's, M&S and Waitrose were among those imploring her to exempt shops from a new business rates surtax.

Failed

The grocers, also including Lidl, Aldi, Morrisons, and Iceland, said if she failed to listen: "Our ability to deliver value for our customers will become even more challenging and it will be households who inevitably feel the impact.

"Given the costs currently falling on the industry, including from the last Budget, high food inflation is likely to persist into 2026. This is not something that we would want to see prolonged." It came as Health Secretary Wes Streeting yesterday admitted family finances and the economy are in a "challenging state".

Ms Reeves is reported to be considering increasing income tax as she desperately searches for extra cash to boost the Treasury's coffers.

But another of the Chancellor's mooted money-raising plans, for a "mansion tax", was criticised by former Bank of England governor Lord Mervyn King as "back of a fag packet" stuff.

Ms Reeves is widely expected to raise taxes next month following gloomy economic forecasts and U-turns on cuts to welfare spending, which have made it more difficult for her to meet self-imposed borrowing rules.

Her nightmare Budget last year stung taxpayers for £40billion.