Food and drink inflation in the UK is set to climb to 5.7% by December 2025, outpacing earlier predictions and putting further strain on households and industry alike.
The latest forecast from the Food and Drink Federation (FDF) highlights that ongoing cost pressures driven less by global commodities and more by domestic regulation and policy measures are shaping the future of UK food prices.
Even as energy and traditional supply chain challenges ease, the cumulative impact of government-imposed costs continues pushing inflation upwards at a rate greater than seen in much of Europe.
Karen Betts, Chief Executive, The Food and Drink Federation (FDF), said: “It’s concerning seeing food and drink inflation rise further, to 5.1% in August, when commodity and energy prices are fairly stable.
“There are still notable pressures on coffee, cocoa, olive oil and dairy prices, but otherwise the continued rise is explained by regulatory and tax costs. This year’s increases to employer National Insurance Contributions, the new packaging tax, business rates rises and the cost of border checks including to Northern Ireland are heaping costs on our sector.
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“We need government to bring down the cost of regulation – so it’s better designed, easier to implement, and better sequenced so it doesn’t all land at once on companies struggling to cope.
“Manufacturers are looking to the Chancellor in the Budget to ensure we have proper policies and incentives in place to drive productivity growth across food and drink, to offset regulatory and tax costs, and to boost the employment and prosperity that food and drink manufacturing provides in communities up and down the country. She must resist bringing in new costs to ensure the UK is an attractive place to invest.”
