UK’s lorry driver shortage ‘could push food prices up’, as supply chain crisis hits confidence – as it happened

By Financial24 Last updated Aug 26, 2021

Rolling coverage of the latest economic and financial news

Latest: UK’s lorry driver shortage ‘could push food prices higher’
ONS: 7% of firms couldn’t get materials and staff in last fortnight
Transport and storage firms lagging in the recovery
UK labour shortage hits consumer-facing firms
UK car production slumps to lowest July since 1956
UK farm sector worried by labour shortages

5.48pm BST

Time to wrap up, after another day dominated by concerns over the UK’s supply chain problems. Here’s a quick summary:

Supermarkets and hauliers have warned that the lorry driver shortage gripping the UK could push up food prices in the shops.

Certainly drivers’ pay is increasing, often by quite substantial amounts.

This in turn is a cost that will need to be passed on, and given the tight profit margins of most haulage operators that means their rates to customers will have to go up.

The chaos hitting supply chains is of the Conservatives’ making. Their failure to keep their promise to cut red tape for businesses, which are struggling with more paperwork and higher costs, combined with worker shortages, has created a perfect storm.

Whether it’s production grinding to a halt in our car factories, shelves emptying in supermarkets, or restaurants running out of food and drink, businesses are ringing the alarm and saying these problems are only going to get worse.

5.43pm BST

The Guardian’s latest Covid Crisis watch report shows that Britain’s economic recovery from the winter lockdown is showing signs of stalling, amid shortages of workers and supplies due to the double whammy of the pandemic and Brexit.

Despite the easing of most government pandemic restrictions, consumer caution appears to have crept higher in the past month as the Delta variant fuels a persistently high infection rate. In the meantime, UK businesses have come under pressure from global supply chain disruption and staff shortages.

The Covid crisis has led to huge changes in how economic activity takes place. Some of those will last; some will be beneficial. But they are not magic bullets targeted at the big economic challenges the UK faces. If we want some positive change to come from the pandemic we need to make, not wish for it, to happen. The pandemic has highlighted the inequalities scarring Britain – but also shown this Conservative government that acting boldly can make a huge difference, as with furlough.

The insecurity at the bottom of our labour market can be tackled with new rights and proper enforcement to make them a reality. We can level up by keeping the £20 a week increase to universal credit that one in three working-age families in “red wall” constituencies rely on. We can properly fund our further education colleges if we want to tackle disgraceful gaps in education.