Data from the British Retail Consortium (BRC) indicates that food inflation is on the rise, with a notable increase in prices for essential items like eggs and butter. The inflation rate for food reached 4.2% in August, up from 4% in July, marking the highest level since February 2024. The overall shop price inflation rose to 0.9% in August, while non-food items saw a decrease of 0.8%.
BRC Chief Executive Helen Dickinson attributes the increase in staple food prices to high demand, tighter supply, and rising labor costs. Additionally, global cocoa prices have driven up chocolate costs, partly due to poor harvests. Furthermore, an upcoming £7 billion in new costs for the retail industry, stemming from recent changes to national insurance contributions and minimum wage, is also influencing prices.
A group of over 60 retail executives, including leaders of major chains like Tesco and Sainsbury’s, has expressed concern that further tax increases could negatively impact living standards in the UK. They anticipate food inflation could rise to 6% later this year.
Mike Watkins from NIQ noted that various factors, including global supply chain costs, seasonal price increases due to weather, and the conclusion of promotional offers, are contributing to rising prices. He suggested that households might need to reevaluate their budgets in light of these financial changes.
Separate official figures reveal that overall inflation rose to 3.8% in July, influenced by increased food prices and transportation costs. The consumer prices index shows that food and non-alcoholic beverages saw a year-on-year increase of 4.9% in July, up from 4.5% the previous month.
In addition to grocery price increases, households are also facing higher energy bills, with forecasts indicating a potential rise in the energy price cap by 1% in October. Charities warn that this could place additional financial strain on many households already struggling with energy costs.
Source: https://www.theguardian.com/business/2025/aug/26/egg-and-butter-prices-drive-up-uk-food-inflation-as-households-feel-squeeze