The Food and Drink Federation (FDF) has warned that UK food inflation could reach 9% by the end of 2026, nearly tripling its pre-conflict forecast of 3.2%. The revised prediction comes amid rising energy costs linked to the Iran war and disruptions in the Strait of Hormuz.
Chancellor Rachel Reeves met with supermarket bosses on Wednesday to discuss mitigating the impact on consumers. The meeting included leaders from Tesco, Sainsbury's, Morrisons, Marks & Spencer, Aldi, and Lidl. Retailers reportedly asked for help with energy bills and a delay on new regulatory fees.
Dr Liliana Danila, chief economist at the FDF, described the situation as 'unprecedented and hard to predict,' noting that rising energy, transport, and packaging costs will inevitably push up food prices. The 9% forecast assumes the Strait of Hormuz reopens within weeks and major energy facilities return to normal within a year.
UK farmers have warned of potential shortages of tomatoes, cucumbers, peppers, and aubergines without government support on energy bills. Simon Conway of the British Tomato Growers' Association said growers cannot absorb cost shocks and may go bust later this year.
A government spokesperson called the meeting 'positive,' with both sides agreeing to explore ways to ease the cost of living and strengthen supply chains. However, Reeves did not commit to specific measures, indicating that any help would be targeted at the most vulnerable households.
