Food and fuel inflation is putting pressure on the UK supply chain

The UK inflation rate in March was at 2.3 per cent

According to an insolvency firm, Inflation in both food and fuel is putting pressure on firms working in the UK supply chain.

Begbies Traynor found that a total of 22,000 firms were facing “significant financial distress” in the logistics and wholesale sectors.

It also spoke of how the new National Living Wage will also add to the pressure, costs will also be passed onto the consumer.

In March the UK inflation rate sat at 2.3 per cent, this is the highest since 2013.

According to Begbies Traynor, rising energy and food prices, as well as the fall in the pound has contributed to the added pressure these firms are facing.

Since the Brexit vote the pound has fallen around 16 per cent against the US dollar, this has meant that imported goods have got pricier.

Julie Palmer, a partner at Begbies Traynor, said: “It would appear that food suppliers, logistics firms and wholesalers are yet to fully pass on these rising costs to their customers.

“But it is only a matter of time before we start to see this coming through, especially given the added margin pressures associated with the new National Living Wage.”

She also added: “Once those costs ultimately feed through to consumers, we’d expect further pressure on sectors exposed to discretionary spending such as retail, bars and restaurants, travel and leisure.”