Brexit: Makers of Mr Kipling cakes could raise prices as tumbling pound sterling bites

Premier Foods is on average considering price rises around the mid single digit mark

Premier Foods has previously said raising prices would be a last resort for the manufacturing giant

The maker of Mr Kipling cakes and Bisto gravy is in talks with some of its biggest retail customers about cranking up prices as a result of the twin pressures of the tumbling pound and rising commodity prices.

Premier Foods, which has in the past already said that it would take action to limit the impact of the Brexit-hit pound on shop prices, said that it was considering rises on a case-by-case basis as a last resort.

“On average we are considering rises around the mid-single digit mark,” a spokesperson said, adding that the company was talking to individual retail customers about particular categories and brands of products.

In November, the Premier Foods recorded an £8.7m loss for the first half of 2016, in contrast to a £5.1m loss for the same period of the previous year.

At the time it also said that results had been hit by warmer weather triggering a drop in demand for gravy, soup and stock sales.

Premier Foods is due to publish a trading update for the third quarter on 18 January.

Last week high street retailer Next warned shoppers that they could face price rises of up to 5 per cent in 2017 due to the falling pound in the wake of the UK’s decision to quit the EU, with cost pressures likely hitting annual profits by up to 14 per cent.

Some economists have forecast sterling will slump to a fresh all-time low when Prime Minister Theresa May starts official proceedings to leave the bloc.