UK Food Inflation Expected to Reach 6% by Christmas, Retailers Warn

Food price inflation in the UK is projected to reach 6% by the end of 2025, up from the current 4%, largely attributed to the Labour government's April budget which increased employer national insurance and the national living wage. Retailers, represented by the British Retail Consortium (BRC), have warned that this inflation will significantly challenge household budgets, especially ahead of Christmas, with many retail CFOs feeling pessimistic about the trading conditions and some freezing or cutting jobs. The rise in food prices is part of broader inflationary pressures including energy, rent, and water cost increases, which are straining low-income families and increasing reliance on food banks and community meal programs. In Ireland, food prices have risen 4.6% over the last 12 months, reflecting a similar inflation trend within the EU, though overall inflation in Ireland remains lower than in the UK. Budget supermarkets like Lidl and Aldi have gained market share amid these price increases, highlighting a shift in consumer behavior towards more affordable options. Analysts caution that food inflation may remain volatile due to ongoing uncertainties such as weather and global supply costs, despite some forecasts of eventual easing by mid-2027.