The Food and Drink Federation (FDF) has warned that UK food inflation could reach 9% by the end of 2026, nearly tripling its previous forecast of 3.2% made before the Iran war. The prediction assumes the Strait of Hormuz reopens within weeks and major energy facilities return to normal within a year.
Chancellor Rachel Reeves met supermarket bosses on Wednesday to discuss easing the impact of cost inflation on consumers. Retailers including Tesco, Sainsbury’s, Morrisons, Marks & Spencer, Aldi and Lidl attended the meeting at No 11 Downing Street. They reportedly asked for help on energy bills and a delay on new regulatory fees.
Dr Liliana Danila, chief economist at the FDF, said the industry faces rising energy, transport and packaging costs, as well as supply chain disruptions. “The current situation is unprecedented and hard to predict,” she said. “Given the scale and speed of these cost increases, it’s clear that food inflation is going to rise in the months ahead.”
UK farmers have warned that without government support on energy bills, there could be shortages of tomatoes, cucumbers, peppers and aubergines. Simon Conway, chair of the British Tomato Growers’ Association, said growers historically only make money in the last few weeks of the season. “No one can absorb these kind of cost shocks,” he added.
The government has so far suggested any help would be targeted at the most vulnerable households. A government spokesperson described the meeting as “positive”, with businesses and ministers agreeing to work together to ease the cost of living and strengthen supply chains.
