Brits warned food inflation could hit nearly 4% by Christmas - and price rises could continue next year

Brits warned food inflation could hit nearly 4% by Christmas - and price rises could continue next year The rise in food inflation and prices is the result of the conflict in Iran, along with the impacts of extreme weather following a summer of heatwaves and droughts Brits have been warned that food inflation could hit nearly 4% by Christmas - with price rises expected to continue into next year. Food and non-alcoholic drink inflation is expected to reach 3.9% by December 2026, according to the latest Food Inflation Forecast from The Food and Drink Federation (FDF). This is the result of the conflict in Iran, along with the impacts of extreme weather following a summer of heatwaves and droughts. Higher energy prices have also put pressure on manufacturers. The FDF predicts consumers will still feel the impact of price rises next summer, with its forecast suggesting food inflation could peak at 6.4% in July 2027. It’s then forecast to remain significantly above average for the second half of 2027. FDF analysis shows food prices have risen by nearly 40% since 2020. This means a £100 weekly shop in 2020 would cost almost £140 today - and it predicts this will approach £150 by next summer because of pressure on the food system. Karen Betts, Chief Executive at the FDF, said: “Food and drink manufacturers have kept food prices as low as possible during the energy shock since the closure of the Strait of Hormuz, including by driving new efficiencies in their operations. But they can’t do this indefinitely. "The persistently higher costs of energy, logistics and packaging, compounded by this summer’s extreme heat, mean that food prices will rise this year, and we believe that rise will be sustained into 2027." The FDF has highlighted some of the key ingredients which has skyrocketed in price due to climate related events. It says the price of wheat is up 45%, cocoa by 100%, rice by 60%, sugar by 27% and coffee by 22%, while produce grown in the UK has increased by almost 10% in the last year. Droughts across the UK and Europe this summer have put further strain on supply, meaning manufacturers will also face higher costs for fruits, vegetables and grains in the months ahead. The FDF says business are having to adapt their ways of working, including diversifying supply chains and hedging their contracts more, to be better able to weather disruptions. Meanwhile, energy bills are rising again this winter with the Ofgem price cap increasing by 4% from October. This means the typical household that pays by direct debit will see their annual energy bill increase from £1,663 to £1,723. The government has temporarily suspended or reduced tariffs on more than 100 — including fruit, fruit juices, pasta, biscuits, chocolate and nuts — to help lower prices for consumers.