The escalating prices of essentials like butter, cheese, and eggs have propelled UK food inflation to its highest in five months, exacerbating the ongoing cost-of-living crisis.
According to the latest figures from the British Retail Consortium (BRC), food inflation climbed to 2.1% in February, a significant increase from 1.6% in January, marking the first surge above 2% since September 2024.
This rise in food prices is intricately linked to inflation expectations, which are monitored by the Bank of England (BoE) as it struggles to steer overall inflation towards its target of 2%.
The BoE now forecasts that headline inflation will escalate from the current 3% to 3.7% by mid-year, before eventually realigning with its target.
The increase in food inflation is partly attributed to the recent uptick in the national living wage and a forthcoming rise in employers’ national insurance contributions set for April, as detailed in the BoE’s February monetary policy report.
Moreover, upcoming recycling regulations, effective from October, are expected to further pressure prices, the BoE noted.
Helen Dickinson, the BRC’s Chief Executive, stressed the need for government action to curb inflation, facilitate retail growth, and support households by addressing the burgeoning costs impacting the industry. Dickinson anticipates food inflation could exceed 4% in the latter half of the year.
She highlighted that breakfast foods have seen notable price increases, including staples such as butter, cheese, eggs, bread, and cereals. Dickinson also warned of potential further hikes due to rising global coffee prices.
According to the BRC, fresh food inflation increased to 1.5% in February from 0.9% in January, while ambient food inflation, covering packaged goods, rose to 2.8% from 2.5%.
The sharp uptick in food prices, initially sparked by Russia’s invasion of Ukraine in February 2022, continues to hit the poorest households the hardest. Official data from January 2025 shows UK food prices were approximately 35% higher than in January 2021.
The BRC, alongside consumer insight firm NielsenIQ, suggests these figures provide early signs of price pressures ahead of the official inflation data set to be released on March 26.
Mike Watkins, head of retailer and business insight at NielsenIQ, commented on the impact of rising household bills on consumer spending.
He noted that the heightened food inflation might drive more consumers to take advantage of savings through supermarket loyalty schemes.
While overall grocery inflation remained stable from the previous month at -0.7%, non-food prices saw a decline of 2.1% annually.
Dickinson noted that widespread discounting is becoming more common as retailers strive to attract customers amid weak demand.
