Rising food prices and persistently high energy bills are jeopardising Labour's promise to boost living standards and fend off the political challenge from Reform UK, ministers have been warned. MPs, economists and industry figures say both food and energy will remain among the biggest household costs as the Government seeks to raise disposable incomes.
Butter has seen the steepest rise, nearly 20% more expensive over the past year, while chocolate and lamb inflation exceeds 10%. Other staples including coffee, potatoes, fruit juice, dried fruit and nuts have risen by more than 5%. The Food and Drink Federation (FDF) forecasts that cocoa and butter prices will continue to grow, with overall food and drink inflation expected to spike by an average of 4.3% in 2025.
FDF director of sustainability and growth Balwinder Dhoot blamed higher national insurance contributions and new packaging levies, calling it a £1.8bn hit to the industry that will partly be passed on to consumers. He also warned that new workers' rights and higher taxes on fizzy drinks would push up inflation.
Energy bills remain much higher than pre-pandemic levels. Cornwall Insight's Craig Lowrey noted the current price cap of £1,850 a year for a typical dual-fuel household will drop to above £1,700—still well above the £1,200 cap a few years ago. He said the drop is welcome but bills are still far higher than at the beginning of the decade.
Labour MPs urged the Government to prioritise tackling the cost of living alongside reducing immigration to avoid losing voters to Reform and the Greens. Loughborough MP Jeevun Sandher said voters' key question is: 'Do I have more money in my pocket at the end of the month?' He called for investment in clean energy, housing insulation, and job creation in post-industrial areas.
A No 10 source insisted cost of living is 'absolutely this Government’s focus', pointing to interest rate cuts and a higher minimum wage. The Government also expects a deal with the EU on food safety standards to reduce cross-border costs and help lower prices.
