UK Food Inflation Hits One-Year High Driven by Rising Fresh Produce Costs

Food inflation in the UK reached a one-year high in May, rising 2.8% and marking the fourth consecutive month of increases, driven primarily by sharp price rises in fresh foods such as beef, milk, and eggs. The British Retail Consortium (BRC) highlighted that rising costs for retailers, including increased minimum wages and higher employer National Insurance contributions, are being passed on to consumers. Beef prices surged to record levels due to stable demand and limited supply, with supermarket beef products becoming 8.2% more expensive on average over two months. While overall shop prices experienced slight deflation, fresh food inflation remains a significant concern, complicating the Bank of England's monetary policy outlook. Analysts note that despite promotional activity offering some relief at checkout, rising food prices add pressure on households already facing increasing bills and weak consumer confidence. The anticipated price war among British grocers appears less likely, as retailers grapple with higher operational costs rather than engaging in aggressive price cuts.