Food price inflation in Britain is expected to rise to 3.9% by December and reach 6.4% by July 2027, driven by the effects of the U.S. Iran war, drought in Europe and the El Niño weather pattern, the Food and Drink Federation said on Wednesday.
The forecast is sharply lower than the federation’s previous estimate of almost 10%, but the industry group warned that higher energy, transport and packaging costs would continue pushing prices higher into 2027.
“Food and drink manufacturers have kept food prices as low as possible during the energy shock,” FDF Chief Executive Karen Betts said, warning that businesses could not absorb rising costs indefinitely.
Official data showed food and drink inflation fell to 1.3% in July, its lowest level since August 2024, while overall consumer inflation rose to 2.9%.
The Bank of England expects food inflation to reach 3.5% by December, with overall inflation rising to 3.1%.
The FDF said food and drink prices had increased by almost 40% since 2020. It also urged the government to reconsider planned restrictions on marketing unhealthy foods, saying higher payroll taxes and tighter advertising and packaging rules had added about £2 billion in costs last year.
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