Food and drink inflation continued its upward trajectory in August, hitting 5.1% according to latest data from the Office for National Statistics (ONS).
The figure, up from 4.9% in July, marks the fifth consecutive monthly rise and the highest level recorded since January 2024.
The ONS tracks 49 key food and drink categories, and the latest report highlights the sharply divergent fortunes across the basket. Five categories posted double-digit inflation: beef and veal (24.9%), butter (18.9%), chocolate (15.4%), coffee (15.4%), and whole milk (12.6%). Environmental pressures are also playing their part, with climate-related harvest shocks continuing to drive up costs in categories such as coffee, chocolate and dairy.
Karen Betts, Chief Executive, The Food and Drink Federation (FDF) described the news as “concerning”, pointing out that this year’s increases to employer National Insurance Contributions, the new packaging tax, business rates rises and the cost of border checks – including to Northern Ireland – were “heaping costs on our sector”.
Some staple ingredient prices, however, are easing. While olive oil fell 12.5% compared to last year, it remains more than 120% higher than its pre-pandemic level in 2020. Flour, sugar, and pasta were also lower by between 2.8% and 5.9%.
Betts said the government needs to bring down the cost of regulation – so it’s better designed, easier to implement, and better sequenced to not “all land at once” on companies struggling to cope.
She added: “Manufacturers are looking to the Chancellor in the Budget to ensure we have proper policies and incentives in place to drive productivity growth across food and drink, to offset regulatory and tax costs, and to boost the employment and prosperity that food and drink manufacturing provides in communities up and down the country. She must resist bringing in new costs to ensure the UK is an attractive place to invest.”
