The impact of food inflation on the cost of living

Developments in food price inflation

The UK food and non-alcoholic drink inflation rate – the annual percentage change in prices – rose during much of 2025: from 2.0% in December 2024 to 5.1% in August 2025.

Food price inflation then eased to 4.2% in November 2025 (meaning prices were 4.2% higher in November 2025 than in November 2024). Overall UK inflation was 3.2% in November 2025.

As the chart below shows, food price inflation during 2025 was well below the recent peak of 19.1% in March 2023, the highest rate of increase in food prices since 1977.

* Food and non-alcoholic drink prices, UK CPI measure, monthly data to Nov’25.
Source: ONS, CPI: food and non-alcoholic drink, annual change, series D7G8

The chart below shows the cumulative effect of inflation on food price levels over the past five years. UK food prices rose by a total of 38.6% between November 2020 and November 2025. Most of this increase came during late 2021 to mid-2023 (the steep part in the chart).

* Food and non-alcoholic drink prices, UK CPI measure, monthly data
Source: Library calculations based on ONS, CPI: food and non-alcoholic drink, series D7G8

For context, UK households on average spent 11% of all their spending on food and non-alcoholic drink in 2023/24.

Impact on households

The Library briefing paper High cost of living: Impact on households covers the how the period of high inflation from 2021 to 2024 continues to affect household incomes, spending and poverty.

In November 2025, 61% of adults in Great Britain reported an increase in their cost of living compared with the previous month. Of those whose cost of living increased, 95% said it was because food shopping had increased in price.

The percentage of people in food insecure households rose from 7% in 2021/22 to 11% in 2022/23 and 2023/24.

Why food price inflation rose in 2025

One reason for rising food prices in 2025 was an increase in global agricultural commodity prices. As many foods are traded internationally, their prices are largely determined in international markets. For example, weather-related events, such as droughts and flooding, hit crop yields of some commodities, such as coffee and cocoa. Chocolate prices in the UK were 17% higher in November 2025 than a year before.

The Bank of England says that domestic factors have also contributed to the recent increases in food price inflation. The Bank mentions domestic labour costs and relatively high pay growth in sectors like food manufacturing and retail, including the effects of the 6.7% rise in the National Living Wage in April 2025.

The Bank also referenced the introduction of the Extended Producer Responsibility regulations for packaging as a factor adding a little to food prices (as firms pass on some of these extra costs to consumers).

The Food and Drink Federation (FDF), which represents companies in the food manufacturing industry, said firms are passing on some of their cost increases. It said government regulation and policy decisions, like the increase in employer National Insurance contributions, had contributed to this.

The September 2025 article Food inflation: seven reasons. Plus: how bad will it get? in The Grocer, a food industry news service, highlighted additional factors such as post-Brexit trade-related barriers with the EU, business rates for supermarkets and upcoming deforestation regulations which will affect supply chains.

Parliamentary material Debate

Poverty and Welfare Policies

6 January 2026 | Westminster Hall

Parliamentary question

Food: Prices
1 December 2025 | UIN 96001

Asked by: Neil Duncan-Jordan

To ask the Chancellor of the Exchequer, what steps the Government is taking to reduce inflation in the prices of food.

Answering member: Lucy Rigby | Department: HM Treasury

The Government has announced a Food Inflation Gateway to assess and monitor regulation that could add to food prices. This will improve coordination and give food businesses a clear line of sight on upcoming regulatory changes, helping to keep costs down

The Government is also negotiating an agri-food agreement with the EU to reduce trade frictions, which is expected to save businesses up to £200 per fresh food shipment, helping to limit cost pressures across supply chains.

In addition, supermarkets will see a reduction in their total business rates bills in 2026/27 compared with 2025/26, and this will be kept under review at the next revaluation. The Office for Budget Responsibility (OBR) does not expect changes in business rates to have a material impact on food inflation.

Overall, the OBR’s forecast shows government policy will reduce CPI inflation by 0.4 percentage points in 2026/27. This is the biggest near-term reduction in inflation due to government policy ever forecast by the OBR at a single fiscal event, outside of a crisis.

Further information

Inflation in the UK: Economic indicators, Commons Library statistical research briefing, updated 18 December 2025

Food banks in the UK, Commons Library research briefing, updated 31 July 2025

No let-up for millions of families in hardship: JRF’s cost of living tracker, winter 2025, Joseph Rowntree Foundation, 17 December 2025

A UK government food strategy for England, UK government, July 2025