Iceland has blamed Chancellor Rachel Reeves’ Budget for pushing up food prices.

The frozen food specialist warned it will “inevitably have to pass [some cost increases] onto consumers” as its suppliers look to recover higher labour costs following changes to National Insurance employer contributions and the National Minimum Wage, The Telegraph reported.

According to the retailer’s latest accounts, it expects UK food price inflation to peak at between 4% and 5% in the next six months.

Iceland said: “We are doing our utmost to offset the growing input cost pressures caused by suppliers seeking to recover the increase in their own labour costs arising from last autumn’s Budget, but will inevitably have to pass some of these on to consumers, where we can do so without weakening our own price position in the marketplace.”

The warning comes after Iceland’s chairman Richard Walker urged rival supermarket bosses to stop “wallowing” and “complaining” about the Budget in December.

“This isn’t a time for businesses to wallow… The Government isn’t going to change its mind. It was a tough Budget, but we adapt,” he said.

Ocado Group CEO Tim Steiner lashed out at Reeves last month, stating that it was “unrealistic” not to expect higher costs from the Budget not to result in food price hikes.

“You can’t increase the cost of labour in food production and food distribution and food retailing in the way that we have, with National Insurance increases and the minimum wage increases, and not expect to see prices move. That would have been a wholly unrealistic expectation if anyone had that,” he said.

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