UK food prices to keep rising through 2024, industry researcher cautions

British food and drink prices will continue to rise in 2024, contributing to an extended cost-of-living crisis, a prominent grocery industry researcher said on Thursday.

Food and drink inflation will be between 0.3 per cent and 2.3 per cent by the end of the year, the Institute of Grocery Distribution (IGD), whose forecasts on UK food inflation have proved to be broadly accurate, estimated in its latest report.

UK food price inflation reached its highest since 1977 in March last year at over 19 per cent. Though this official measure slowed to 8 per cent in December, rising food prices remain a major strain on the finances of many households.

“The recent inflation figures highlight that the cost-of-living crisis is still real for many consumers,” Michael Freedman, IGD’s head of economic and consumer insight, said.

“There is a real divide between mainstream society and those on the lowest incomes.”

Household living standards have fallen over the past two years due to high inflation, contributing to the electoral challenge facing Prime Minister Rishi Sunak, who has suggested he will hold a national election in the second half of the year.

Britain’s overall inflation rate was 4.0 per cent in December.

In November, the Bank of England forecast that the rate of inflation would exceed 3 per cent throughout 2024. It will update its forecasts on Feb. 1.

The IGD report also said food businesses will need to keep abreast of a slew of upcoming policy changes this year.

These include the introduction of new post-Brexit border checks for goods imported into the UK from the European Union, and a review of origin labelling for food and consumer goods.