UK food inflation hits five-month peak as prices for breakfast staples soar

The rising prices of butter, cheese, and eggs have driven UK food inflation to a five-month high, according to recent sector data that highlights the ongoing pressures on the cost of living.

According to data obtained by Financial Times from the British Retail Consortium (BRC), annual food inflation reached 2.1% in February, up from 1.6% in January, marking the first time it has exceeded 2% since September 2024, per Caliber.Az.

Food prices are a key driver of inflation expectations, and the Bank of England (BoE) has noted that these expectations complicate efforts to reduce overall inflation to its 2% target. The BoE predicts headline inflation will rise from the current 3% to 3.7% by mid-year, before eventually returning to its target.

In its February monetary policy report, the BoE attributed the recent increases in food price inflation partly to the national living wage rise and an increase in employers' national insurance contributions, both of which take effect in April. New recycling regulations, set to come into force in October, are also expected to keep prices elevated.

Helen Dickinson, CEO of the BRC, emphasized the need for government intervention to help control inflation: “If the government wants to keep inflation at bay, enable retailers to focus on growth, and assist households, it must mitigate the array of costs facing the industry.” Dickinson anticipates that food inflation will exceed 4% by the second half of the year.

“Breakfast, in particular, has become more expensive, as butter, cheese, eggs, bread, and cereals have all seen price hikes,” she added. “Rising global coffee prices could further push up costs in the coming months.”

The BRC’s figures show that fresh food inflation rose to 1.5% in February, up from 0.9% in January. In contrast, ambient food inflation, which includes packaged goods, climbed to 2.8% from 2.5%.

Food prices have been on the rise since Russia’s invasion of Ukraine in February 2022, with the poorest households being hit hardest. According to official data, UK food prices were around 35% higher in January 2025 compared to January 2021.

The BRC, in collaboration with consumer insight firm NielsenIQ, provides early insights into price pressures before official inflation data is released on March 26.

Mike Watkins, head of retailer and business insight at NielsenIQ, noted that many households are facing increasing bills in the coming weeks. “Shoppers will be looking closely at their discretionary spending,” he said. “The rise in food inflation is likely to prompt more consumers to take advantage of savings available through supermarket loyalty schemes.”

Overall grocery inflation remained unchanged from the previous month, at minus 0.7% in February, as non-food prices fell by an annual rate of 2.1%.

By Tamilla Hasanova