Beef, milk, and confectionery are among the fastest-rising prices at British supermarkets, as experts warn that the Iran war could drive food inflation to 10 per cent by the end of 2026. The Office for National Statistics (ONS) reported that the cost of beef and veal increased by 18.8 per cent in the 12 months to March, while whole milk rose by 12.7 per cent.
Rising Costs Behind Price Hikes
The price of beef is climbing rapidly due to a combination of low supply, high demand, and rising production costs for feed, energy, and labour. Similarly, milk prices are soaring because of higher input costs for farmers, including feed, fuel, and fertiliser, alongside increased packaging, transport, and energy expenses.
Other Notable Increases
Confectionery products rose by 11.1 per cent year-on-year, with chocolate up 10.9 per cent. Preserved fruit increased by 10.4 per cent, and fresh fish by 10.1 per cent. Mineral or spring waters saw a 9.4 per cent rise, while coffee climbed 9.0 per cent, according to data analysed by the Food and Drink Federation (FDF).
Tea and ready-made meals both rose by 6.7 per cent, ice cream by 6.3 per cent, lamb and goat by 5.9 per cent, soft drinks by 5.6 per cent, and pork by 4.8 per cent. Eggs and fresh vegetables (excluding potatoes) each increased by 4.6 per cent, pasta by 4.4 per cent, and breakfast cereals by 3.8 per cent. Other items rising at least 2 per cent include bread, sauces and condiments, poultry, fresh or chilled fruit, and dried, salad, or smoked meat.
Items That Fell in Price
However, prices fell for nine items, with the largest drops for flours (down 6.8 per cent), olive oil (down 6.2 per cent), and pizza and quiche (down 2.6 per cent).
Overall Food Inflation Trends
The ONS said overall food and non-alcoholic drink prices rose by 3.7 per cent in the 12 months to March, up from 3.3 per cent in February. On a monthly basis, prices increased by 0.3 per cent. Ice cream recorded the biggest jump between months, from an annual rate of 1.7 per cent in February to 6.3 per cent in March. In contrast, annual inflation eased for crisps (0.3 per cent in March, down from 2.0 per cent in February) and margarine and other vegetable fats (3.1 per cent, down from 5.2 per cent).
FDF Forecasts Soaring Inflation
The FDF, representing 12,000 food and drink manufacturers, now predicts food inflation could reach 9 to 10 per cent by the end of 2026, up from its September forecast of 3.2 per cent. FDF chief economist Dr Liliana Danila said: "The clouds are gathering, but the storm has not yet broken on rising food and drink inflation. The war in Iran has delivered a cost shock that is already too large for manufacturers to absorb in full." She added that higher costs take time to pass through supply chains, with less processed goods seeing faster price increases.
Impact of the Iran Conflict
The conflict between US-Israeli and Iranian forces since late February has disrupted energy production and transportation through the Strait of Hormuz, pushing up oil and gas prices. The ONS reported overall CPI inflation of 3.3 per cent for March, up from 3 per cent in February, driven largely by fuel prices. Motor fuel prices jumped 8.7 per cent month-on-month, the largest increase since June 2022.
Harvir Dhillon, economist at the British Retail Consortium, noted: "The first signs of inflationary pressure stemming from the conflict in the Middle East began to emerge last month, driven largely by rising fuel prices." He warned that if food prices follow the trend seen after the Ukraine-Russia conflict, they could ramp up more notably throughout 2026.
Consumer Impact
Separate data from Worldpanel by Numerator found grocery price inflation held steady at 4.3 per cent in March, with warnings that it is likely to increase. Researchers noted that over 20 per cent of Britons describe themselves as financially struggling, and more than 60 per cent are very or extremely concerned about rising grocery prices. Each additional 1 per cent on inflation could add over £50 to the annual supermarket bill for the average household.
