UK food inflation hits near two-year low

UK food and non-alcoholic beverage inflation has dropped to a near two-year low of 1.7% for the 12 months ending June 2026. This figure is significantly lower than the 9% increase previously predicted by the Food and Drink Federation and falls below the Bank of England’s earlier forecasts.

Industry analysts attribute this trend to several factors, including intense competition among supermarkets for market share, consumer resistance to price hikes, and improved hedging strategies by suppliers regarding energy and ingredient costs. Retailers and suppliers have also implemented cost-cutting measures to manage rising wages, taxes, and regulatory expenses.

While overall UK inflation has generally remained higher than in the euro zone, the subdued food inflation may provide relief for households as the government prioritizes cost-of-living issues.