Food and drink inflation soared to its highest level in 15 months in May, official figures show. The latest data from the Office for National Statistics (ONS), prices increased at a rate of 4.4% in the year to May 2025, compared to 3.4% in April.
According to Dr Liliana Danila, lead economist at the Food and Drink Federation (FDF), this marks the highest level recorded since February 2024, when prices increased by 5%. Explaining the increase, Dr Danila attributed rising energy and ingredients costs as the main driver. She said: “Food manufacturing is an energy-intensive sector, and wholesale gas prices are 7.8% higher compared to last May, as UK businesses face significantly higher industrial energy costs compared to other nations.”
She continued: “Meanwhile, the price of ingredients has also surged. For example, in the last two years, the price of cocoa has tripled, while wholesale butter prices are also 55% higher than last year.
“Recent and upcoming regulations are also bringing additional costs to manufacturers.”
With these price increases, coupled with a drop in consumer confidence and a fall in retail sales, Dr Danila said: “Food manufacturers have been absorbing rising costs for several years.”
However, she said: “Recent geopolitical uncertainty is also likely to result in higher pressure on energy and imports, and so unstable manufacturing costs are likely to persist. As a result, we now expect to reach our forecast of 4.8% food and drink inflation for December sooner than anticipated.”
The ONS reports on 49 main food and non-alcoholic drink product categories, which have seen a mixed performance.
According to the FDR’s analysis, seven categories saw inflation in double digits. These include butter (18.2%), chocolate (17.7%), beef and veal (17.0%), coffee (13.9%), lamb and goat (11.2%), edible offal (10.1%), and cocoa and powdered chocolate (10.1%).
However, prices fell the fastest for olive oil (-6.0%), pasta products and couscous (-6.0%), and rice (-2.9%).
The UK’s overall Consumer Price Index (CPI) inflation rate was 3.4% in May 2024. Food and non-alcoholic drink inflation contributed the largest share to it.
It marks a marginal drop from April, which was recorded at 3.5%. However, the ONS said that an error in vehicle tax data collected meant April’s CPI rate should have been 3.4% – but that it was not revising the official figure.
Most economists expected the CPI rate to be 3.3% for May as price rises cooled following a raft of bill increases the previous month, which pushed inflation to the highest level in more than a year.
Chancellor Rachel Reeves said there was « more to do » to bring down inflation and help with the cost of living.
She said: « We took the necessary choices to stabilise the public finances and get inflation under control after the double-digit increases we saw under the previous government, but we know there’s more to do. »
Shadow Chancellor Sir Mel Stride said: « This morning’s news that inflation remains well above the 2% target is deeply worrying for families. »
Experts cautioned that inflation is expected to remain elevated over the rest of 2025 and flagged concerns over the impact of global conflict on energy prices.
Monica George Michail, associate economist for the National Institute of Economic and Social Research (NIESR) said the institute was forecasting inflation to remain above 3% for the rest of the year amid « persistent wage growth and the inflationary effects from higher Government spending ».
She said: « Additionally, the current tensions in the Middle East are causing greater economic uncertainty.”
