Food inflation jumps to 18-month high as chocolate and butter prices rise

Food prices have risen at their fastest pace for 18 months amid surges in the cost of chocolate, butter and eggs, latest figures show.

Food inflation lifted to 4.2% this month from 4% in July, according to the British Retail Consortium (BRC)-NIQ Shop Price Monitor.

It marked the highest level since February 2024.

Bosses at the trade body warned that the acceleration in price increases “adds pressure” to families who are already under pressure from the cost of living.

Fresh food inflation sped to 4.1% for the month on the back of rising dairy prices, up from 3.2% in July.

Meanwhile, ambient food inflation slowed to 4.2% year-on-year compared with 5.1% in the previous month.

The new figures also showed that overall shop price inflation increased to 0.9% in August, despite price deflation of 0.8% for non-food products.

The uptick in food prices comes after the Bank of England said earlier this month that the increase in national insurance contributions in April had contributed to accelerating food prices.

Helen Dickinson, chief executive of the BRC, said: “Shop price inflation hit its highest rate since March last year, fuelled by food price rises.

“This adds pressure to families already grappling with the cost of living.

“Retailers continue doing everything they can to limit price rises for households, but as the Bank of England acknowledged, the £7 billion in new costs flowing through from last year’s budget has created an uphill battle for retailers.”

More than 60 retail bosses, including chiefs at Tesco, Sainsbury’s and Boots, warned Chancellor Rachel Reeves last week that raising taxes further in the autumn budget could contradict her plans to improve UK living standards.

In the letter, co-ordinated by the BRC, the bosses said they were expecting the rate of food and drink inflation to reach 6% later this year.

Mike Watkins, head of retailer and business insight at NIQ, said: “The uptick in prices reflects several factors: global supply costs, seasonal food inflation driven by weather conditions, the conclusion of promotional activity linked to recent sporting events, and a rise in underlying operational costs.

“As shoppers return from their summer holidays, many may need to reassess household budgets in response to rising household bills.”

Published: 26/08/2025 by Radio NewsHub