Food prices have fallen – but inflation expected to rise from here
BBC News 2026-07-22 10:10:01
Context: In the UK, food prices have fallen, contributing to a decrease in inflation, which has dropped to 2.6% in the year to June, down from 2.8% in the year to May. The decline is attributed to lower fuel and food prices, with supermarket price wars and summer deals driving down costs. However, analysts warn that the fall is temporary, as higher energy prices in July are expected to push inflation back up.
Key Facts
- The Office for National Statistics (ONS) reported that food and non-alcoholic beverage inflation fell by 0.2% month-to-month, with sugar, chocolate, and confectionery seeing the largest drop in price.
- Beef and veal price inflation eased from 9.4% in the 12 months to May to 5.1% in the year to June, while edible offal slowed from 9.2% to 3.4% over the same period.
- Pizza and quiches fell by 6.7% in the year to June, and margarine dropped by 1.9% in the same period.
- The British Retail Consortium (BRC) attributed lower food inflation to "intense competition between supermarkets," and BRC economist Harvir Dhillon called on the government to take practical steps to lower the everyday cost of doing business.
- The Bank of England's target inflation rate is 2%, and although the current rate is still above this target, chief economist Suren Thiru suggested that a rate increase when the Bank meets next week is unlikely.