Including Viewpoint Special on Budget 2026, the Office for Budget Responsibility’s economic outlook and the impact on the food industry.
Viewpoint Special: What the 2026 Budget means for the food industry
IGD’s latest Viewpoint Special examines what this week’s Budget and OBR forecasts mean for food and drink businesses, household spending power and shopper demand.
Combining economic analysis with ShopperVista insight, the report helps you:
Assess the implications for labour costs, pricing and investment.
Understand the outlook for household finances and grocery demand.
Plan for wider inflation risks from energy, geopolitics and adverse weather.
Viewpoint Special: What the 2026 Budget means for the food industry
IGD’s latest Viewpoint Special examines what the 2026 Budget and economic forecasts mean for food and drink businesses and UK households.
Budget 2026: targeted relief offers limited respite
The Chancellor has delivered the 2026 Budget against a challenging backdrop for businesses and consumers, with higher energy costs and pressure on public finances limiting the scope for support.
Key measures include:
National Living Wage rises to £13.21 per hour from April 2027 (up 3.9%)
Fuel duty concessions retained until July 2027
Temporary reduction in import tariffs on selected food products
Expanded business rates relief for eligible retail, hospitality and leisure businesses in England
Alcohol duty to rise with inflation from February 2027, with additional relief for small producers
IGD opinion
Targeted concessions offer some relief, but do not fundamentally change the cost outlook for food businesses. Higher payroll costs will limit the overall relief, while energy prices, geopolitical disruption and adverse weather remain important risks beyond the Budget. Businesses should assess the net impact of the measures rather than assume an overall improvement in margins.
OBR forecasts point to subdued consumer demand in 2027
The Office for Budget Responsibility’s latest forecasts point to weak economic growth and continued pressure on household spending power, as higher energy and borrowing costs weigh on the outlook.
Key forecasts for 2027 include:
GDP growth forecast at 1.0%
CPI inflation forecast at 3.4%
Average hourly earnings forecast to rise 2.9%
Real household disposable income forecast to grow just 0.2%
Real household consumption forecast to grow 0.6%
IGD opinion
The forecasts point to little room for a strong recovery in consumer demand across markets in 2027. With earnings growth below inflation and household spending subdued, value and affordability are likely to remain central to purchasing decisions. For food and grocery, targeted support may help protect budgets rather than generate a significant increase in demand.