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The rising price of butter, cheese and eggs has pushed UK food inflation to a five-month high, according to sector data that underscores persistent cost of living pressures.
Annual food inflation rose to 2.1 per cent in February, up from 1.6 per cent in January, marking the first time it has gone above 2 per cent since September 2024, according to data from the British Retail Consortium.
Inflation expectations are closely tied to food prices, according to the Bank of England, complicating efforts to bring overall inflation back to its 2 per cent target.
The BoE expects headline inflation to rise from its current rate of 3 per cent to 3.7 per cent by the middle of this year, before returning to target.
In the February monetary policy report, the BoE said the recent increases in food price inflation were likely in part to reflect increases in the national living wage and a rise in employers’ national insurance contributions, which takes effect in April.
New recycling regulations that come into force in October are also a factor in keeping prices high, according to the BoE.
“If government wants to keep inflation at bay, enable retailers to focus on growth and help households, it must mitigate the swath of costs facing the industry,” said Helen Dickinson, chief executive of the BRC.
Dickinson expects food inflation to surpass 4 per cent by the second half of the year.
“Breakfast, in particular, got more expensive as butter, cheese, eggs, bread and cereals all saw price hikes,” she added. “Climbing global coffee prices could threaten to push the morning costs higher in the coming months,” she added.
The BRC said fresh food inflation rose to 1.5 per cent in February from 0.9 per cent in January. Ambient food inflation, which includes packaged goods, climbed to 2.8 per cent from 2.5 per cent.
Food prices surged sharply following Russia’s invasion of Ukraine in February 2022, hitting the poorest households the hardest.
In January 2025, UK food prices were about 35 per cent higher than in January 2021, according to official data.
The BRC, which produces the figures with the consumer insight company NielsenIQ, provides early indications of price pressures ahead of official inflation data for February published on March 26.
Mike Watkins, head of retailer and business insight at NielsenIQ, said: “With many household bills increasing over the next few weeks, shoppers will be looking carefully at their discretionary spend.
“The increase in food inflation is likely to encourage even more shoppers to seek out the savings available from supermarket loyalty schemes,” he added.
Overall grocery inflation was unchanged from the previous month — at minus 0.7 in February — as non-food prices fell by an annual rate of 2.1 per cent.
Dickinson said that discounting items was now widespread “as retailers tried to entice customers against a backdrop of weak demand”.
