Food bills are set to soar as much as 10 per cent this year as a direct consequence of the Iran war, a key industry body has warned.

The Food and Drink Federation (FDF), which represents 12,000 food and drink manufacturers, has hiked its inflation forecast for the year from 3.2 per cent to between nine and 10 per cent.

During the 2022 cost of living crisis, food inflation rose at a rate of 10.9 per cent, figures from the Food and Drink Federation (FDF) show, while the following year was even worse at 14.6 per cent.

Since then, it had dropped back to 2.7 per cent (2024) and 4.2 per cent (2025), but while this year had originally been forecast to deliver food inflation of 3.2 per cent, the latest assessment is that it will instead see a huge rise in the second half of 2026.

The FDF said the current situation is “unprecedented and hard to predict”, but it’s “clear that food inflation is going to rise in the months ahead”.

How much that adds to the average bill depends on the size and frequency of a consumer’s usual grocery habits, but on average, bills could rise by around £588, according to some estimates.

Consumer rights and review site Which? frequently assesses UK supermarkets for cost, and at the start of 2026, an average basket of 89 shopping products cost £161.56 at Aldi and up to £217.02 at Waitrose.

Assuming food inflation lands at the mid-point of the FDF forecast, 9.5 per cent, and that all products and supermarkets applied that uplift equally, that would move the costs of those shops up to £176.91 and £237.64 respectively.

Research from confused.com suggested the average UK household spent £119 each week on food shopping, which is £6,188 each year; a 9.5 per cent uplift to that equates to an extra £588 annually, or a total of just over £130 per week and £6,775 annually.

Chancellor Rachel Reeves is due to meet with some supermarket chiefs on Wednesday, including Sainsbury’s and Tesco, over discussions to assess the upcoming impact of price rises on the cost of living. The Treasury has described it as a “fact-finding” conversation.

Last month, Asda boss Allan Leighton called on Labour to do more to help businesses after creating “a lot of constraints” for them.

For food manufacturers, there is both a concern now and another yet to come in terms of energy cost rises.

Diesel – used in farm machinery – is up by 80 per cent since the start of the war, while fertiliser costs could increase further, as well as supply being constrained. The FDF also points to lost sales due to cancelled shipments to the Middle East, with UK firms regularly exporting cheese, cereals, chocolate and more to the region.

Dr Liliana Danila, chief economist at The Food and Drink Federation, said: “The food and drink sector is already feeling the force of this geopolitical shock. As one of the UK’s energy-intensive industries, manufacturers are facing mounting energy bills, rising transport and packaging costs and disruption across key supply chains.

“These pressures are hitting simultaneously and are a significant challenge for businesses to absorb.

“The current situation is unprecedented and hard to predict; however, given the scale and speed of these cost increases, and despite companies’ best efforts not to pass price increases on, it’s clear that food inflation is going to rise in the months ahead.”

The FDF says its upgraded inflation figures were based on “assumptions that the Strait of Hormuz opens to cargo traffic within the next two to three weeks”, as has been suggested by Donald Trump this week, and that most commodities, including oil, gas and fertiliser production, return to normal within a year.

In the past few months, the FDF has repeatedly called for the government to offer support to businesses in the sector from rising energy bills in the same way as it does to those in some other manufacturing areas.

GST collections: India’s net Goods and Services Tax (GST) collections increased to Rs 1.78 lakh crore in March 2026, marking a rise of 8.2% compared to the previous month, according to official figures released on Wednesday.Gross GST revenue for March stood at Rs 2 lakh crore, which is an 8.8% increase over the same month last year.Abhishek Jain, Indirect Tax Head & Partner, KPMG says, “GST collections continue to show steady 9% annual growth, supported by strong import activity this month and consistent compliance. While export refunds have eased this month but remain healthy overall for the year”Refunds during the month totalled Rs 0.22 lakh crore, up 13.8% on a year-on-year basis, which resulted in net GST collections of Rs 1.78 lakh crore.Domestic GST revenue reached Rs 1.46 lakh crore, registering a growth of 5.9%, while revenue from imports was recorded at Rs 0.54 lakh crore, rising sharply by 17.8% during the period.Post-settlement GST figures across states presented a varied trend. While industrially advanced states recorded strong growth, several others reported a decline.Maharashtra contributed the highest amount to the overall collections at Rs 0.13 lakh crore on a pre-settlement basis, followed by Karnataka and Gujarat.Among states showing an increase in post-settlement SGST collections were Himachal Pradesh, Punjab, Uttarakhand, Haryana, Rajasthan, Uttar Pradesh, Bihar, Gujarat, Maharashtra, Karnataka, Kerala, Tamil Nadu, Telangana and Andhra Pradesh, among others.On the other hand, states such as Jammu and Kashmir, Chandigarh, Delhi, Arunachal Pradesh, Meghalaya, Assam, West Bengal, Jharkhand, Odisha, Chhattisgarh and Madhya Pradesh, among others, registered a decline in post-settlement SGST revenues.

Business sentiment among major Japanese manufacturers rose from 16 to 17 in March, according to the Bank of Japan’s quarterly survey released on Wednesday.

The improvement in the so-called diffusion index in the closely watched “tankan” report, recorded for the fourth quarter straight, comes even as worries grow about Japan’s economic growth and oil supplies because of the US-Israeli war on Iran.

The survey is an indicator of companies foreseeing good conditions minus those feeling pessimistic.

The index for large non-manufacturers, such as the service sector, stood unchanged from the last tankan at 36.

Japan’s inflation has so far remained relatively moderate, but worries are growing about prices at the gas stands and other products. Investors and consumers alike are filled with uncertainty about how much longer the war may last and what US president Donald Trump might say next. Japan’s benchmark Nikkei 225 has gyrated wildly in recent weeks.

Analysts say the Bank of Japan may start to raise interest rates because of concerns about inflation, given the soaring energy costs and declining yen, two elements that greatly affect living costs for the average Japanese consumer.

Historically, Japan has benefited from a weak yen because of its giant exports, exemplified in autos and electronics. A weak yen raises the value of exports’ earnings when converted into yen.

But in recent years, a weak yen is working as a negative, as resource-poor Japan imports much of its energy, as well as other key products such as food and manufacturing components.

The US dollar has been soaring against the yen lately.

Japan’s central bank had a negative interest rate policy for years to fight deflation until it normalised policy in 2024. It kept the rate unchanged at 0.75 per cent in March. The next Bank of Japan monetary policy board meeting is set for April 27 and 28.