A CO2 shortage and higher phone bills are the latest cost of living pressures

Household budgets could soon be under further pressure as rising phone bills and CO2 shortages threaten to add to the cost of living crisis.

Experts warned a CO2 shortage could once again hit supermarket supply chains when a deal struck by the government to solve the crisis in the autumn expires on Monday.

Carbon dioxide is used in the transport and packaging of food, keeping perishable products such as meat, salad and bread fresh for long enough to make it from production to plates.

The UK’s CO2 supply was put at risk in September, when soaring wholesale gas prices – which are also driving increased household energy bills – forced two factories in northern England to close, cutting off 60 per cent of the UK’s CO2 stock. A short-term deal made by ministers allowed production to restart.

But with factories now under the same pressures as the deal ends, further CO2 supply issues could “lead to shortages in the products we find on our supermarket shelves, adding further pressures to families already coping with high food-price inflation,” said Kate Halliwell, chief scientific officer for the Food and Drink Federation.

“We will continue to work with the government on this,” she added. “It is critical that together we ensure supply can continue and that we build long-term resilience into the production of food-grade CO2.”

Food prices are already a growing concern for UK families after inflation hit a thirty-year high last month. If shortages don’t result in empty shelves and higher costs immediately, one expert explained, they could in the longer term – with a cost of living cliff-edge already on the horizon.

“We’re not panicking that we’re heading into a problem immediately,” said Nick Allen, chief executive of the British Meat Processors Association. “But it is frustrating that after three months we’re running up to the line and no one knows where we are.

“The government is optimistic that the plant is not going to close in the short-term. They are less optimistic that in the longer term it will carry on.”

A spokesperson for the Department for Business, Energy and Industrial Strategy said: “The government’s arrangement with CF Fertilisers was necessary to immediately restart operations while a longer-term industry-led agreement was sought without further taxpayer support.

“It is for the CO2 industry to ensure supplies to UK businesses.”

The cost of living could hit a new high in April when the energy price cap increases, the government introduces higher national insurance payments and public transport prices are hiked.

But now analysts are warning the pressure on households will also be driven by a sharp rise in phone bills from March 31.

Companies such as O2, BT, Plusnet and EE could increase their ‘in contract’ charges by – in some cases – nearly 10 per cent this spring, affecting more than 15 million people.

A BT spokesperson said the firm had been hit by the record inflation levels as well as accelerating supply chain costs, meaning bill charges would rise more than usual.