Food inflation has also picked up again, to an annual rate of 3.7% last month, up from 3.3% in February, shows latest CPI inflation figures released today (April 22).
Chocolate and confectionery, meat, fish, and soft drinks became dearer, while bread and cereals, and dairy products pulled the inflation rate lower.
The Food and Drink Federation has crunched the numbers.
- Prices rose the fastest for beef and veal (18.8%), whole milk (12.7%) and confectionary products (11.1%).
- Prices fell for nine categories, with the largest drops for: flours (-6.8%), olive oil (-6.2%), and pizza (-2.6%).
- It will take 7-12 months for cost pressures on manufacturers to feed through to consumers
James Walton, Chief Economist at IGD, comments, “Food and drink inflation increased to 3.7% in March, with meat, fish, confectionery and soft drinks the most affected categories. It is likely that much of this is down to cost pressures already in the supply chain, not the immediate impact of events in the Middle East.
"However, the conflict is having an impact on forecourts, where prices at the pump have already risen. Over time, we expect cost pressures for food businesses to rise because food supply is energy intensive, with oil and gas involved at every stage in the process and this will be passed down the supply chain, eventually to food shoppers.
"Events are already affecting people’s outlook with latest IGD ShopperVista data showing that shopper confidence has dropped to -4, its lowest level since August 2023.
"The current ceasefire may slow further upward pressure but does not reverse costs already incurred and the effects will unfold over months ahead. It will move at different rates in the various categories, with price changes for salads and fruit and vegetables likely to pass through the system more quickly.
"Our forecasts remain unchanged that average food inflation is likely to exceed 4.8% for 2026 but could briefly peak at 8% if disruption to global energy markets persists, in the most severe but short‑lived energy shock scenario.”
Liliana Danila, chief economist at the FDF, said, "The clouds are gathering, but the storm has not yet broken on rising food and drink inflation. The war in Iran has delivered a cost shock that is already too large for manufacturers to absorb in full. The impact on prices will take time to work its way through the system, but it’s only a matter of time before it does.
"For manufacturers, long-term contracts with suppliers and retailers mean it can take up to a year for higher costs to be fully passed through. But where products are less processed, or supply chains are shorter, prices will move more quickly. As a result, absent of any government intervention, we expect a gradual but persistent pickup in food inflation, reaching around 9%–10% by the end of the year.
"This means we’re in a crucial window for action to limit the impact on shoppers. We’re working with government to look at the levers they can pull now to support food manufacturers now to soften the blow on consumers later in the year."