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5h ago

UK Food Inflation Hits 11-Month High as Business Costs Surge

Food prices rose 2.6% in April, driven by higher employer taxes and wage increases, with further pressures expected from upcoming levies.

People queue for food in the financial district of Canary Wharf in London, Britain, May 18, 2022. REUTERS/Kevin Coombs/File Photo
The BRC-NielsenIQ index suggested that grocery costs could accelerate again in the coming months

Overview

  • April's food inflation reached 2.6%, the highest rate since May 2024, following a 0.7% monthly rise in grocery prices after a flat March.
  • Overall shop price inflation remained negative at -0.1% year-on-year, though deflation eased from -0.4% in March.
  • The increase in food prices is partly attributed to a £25 billion rise in employer National Insurance contributions and a 6.7% minimum wage hike.
  • The British Retail Consortium warned of additional upward price pressures, including a packaging levy set to take effect in October.
  • The Bank of England forecasts inflation could climb to 3.7% later in 2025, while retailers anticipate reduced hiring due to the Employment Rights Bill.