Chart: Food inflation rises for third month in a row

In bad news for both consumers and the government, the rate of yearly price increases hit 3.6% in June. This is also the highest rate of inflation since the start of 2024 and still way above the Bank of England target of 2%. 

The Office for National Statistics said the two main factors driving the price increases were fuel and food costs. The rate of inflation in food and non-alcoholic drinks has now risen for three months in a row. 

Retailers have been warning for months that cost increases for businesses in the government budget would be passed through to consumers and the BRC has been clear that this is one of the main causes. “Despite fierce competition between retailers, the ongoing impact of the last Budget and poor harvests caused by the extreme weather have resulted in prices for consumers rising. The price of many staples rose on the previous month, including bread, rice and pasta though consumers in the market for chocolate benefitted from a decrease,” said director of insight Kris Hamer. 

Beyond the products Hamer mentions, the ONS also cites cakes, meat, milk, cheese and eggs as contributing to rising prices. There was also small downward pressure on sugar, jams, syrups and confectionery.

The trend is concerning, but we remain a world away from the massive food inflation rates we were seeing across 2022 and 2023, the peak being 19.2% in April 2023. Wage growth is still (just) outpacing food inflation too. 

That being said, the BRC is warning that proposals for business rate reform could be yet another driver of price increases for consumers. “If the government wants to support households and high streets, they should ensure that no shop pays more as a result of these changes,” said Hamer.