Wagamama-owner Restaurant Group has today forecast an increase in 2021 profit after it reported a first-half profit, but challenges around labour shortages and supply chain constraints flagged by the company sent its shares down 2.8%.

Pent-up demand from people stepping out after pandemic-related lockdowns eased and cost cuts have helped the company.

But UK retailers, cafes and restaurants are struggling with a shortage of drivers and food processing staff.

"Whilst there are some well documented sector challenges to navigate in the short-term, particularly around labour availability and supply chain, we believe the group is well positioned for the long-term," chief executive Andy Hornby said.

The labour shortages are not unique to Britain, but Brexit made matters worse, industry groups say, with an exodus of European drivers.

Restaurant Group reported an adjusted core profit of £11.2m for the 27 weeks ended July 4, compared with a loss of £18.3m last year.

Fast-food giant McDonalds, chicken restaurant chain Nandos and KFC have all pulled some items off their British menu following the shortages.

The country's leading employers are pushing the UK government to take action.