One of Britain's biggest food producers has cautioned that spiralling energy prices will soon push up the cost of everyday products such as pizzas and biscuits. Northern Foods is facing increases of between 60 and 70 per cent in the cost of gas and electricity used for baking.

Stefan Barden, chief executive, said Northern would have to seek price rises of up to 5 per cent on some of its bestselling products to recoup the cost. He said: “We have had a deflationary environment for a decade but inflation is here to stay. Fuel inflation is very high and is going to hit the industry hard over the next six to twelve months. Fuel will feed through into food.”

Northern, which makes Fox's biscuits, reported a 25.3 per cent rise in pre-tax profits to March 29 despite a £40 million rise in costs.

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