UK food inflation could reach 7% this year, businesses have told the Bank of England.<\/p>\n
In the bank\u2019s latest report surveying firms\u2019 opinions on business conditions in the UK, it gave an indication of how respondents viewed the prospects for food inflation in the country in 2026.<\/p>\n
\u201cConsumer goods inflation is still centred on food prices, rising 3\u20134% on a year earlier. Although there is great uncertainty, there is so far more concern over food inflation than for most other goods due to higher energy, transport and agricultural costs,\u201d the Bank of England said today (24 April). \u201cContacts fear that food inflation is likely to rise through 2026, perhaps to 6\u20137%, rather than falling back further as previously expected.\u201d<\/p>\n
On Wednesday, official UK data said the prices of food and non-alcoholic drinks rose 3.7% in March, an uptick on the 3.3% seen a month earlier.<\/p>\n
UK trade association The Food & Drink Federation said on Wednesday it sees food inflation reaching 9-10% in 2026.<\/p>\n
\u201cThe war in Iran has delivered a cost shock that is already too large for manufacturers to absorb in full. The impact on prices will take time to work its way through the system but it\u2019s only a matter of time before it does,\u201d FDF chief economist Dr Liliana Danila said.<\/p>\n
\u201cFor manufacturers, long-term contracts with suppliers and retailers mean it can take up to a year for higher costs to be fully passed through. But where products are less processed, or supply chains are shorter, prices will move more quickly. As a result, absent of any government intervention, we expect a gradual but persistent pickup in food inflation, reaching around 9\u201310% by the end of the year.\u201d<\/p>\n