British food price inflation is likely to climb to nearly 4 per cent by the end of the year and exceed 6 per cent by the middle ​of 2027 due to the ongoing impact of the US-Iran war, drought ‌in Europe and the El Niño weather pattern, an industry body said on Wednesday.

The Food and Drink Federation forecast prices for food and non-alcoholic drinks in December would be 3.9 per cent ​higher than the year before – down sharply from its previous forecast of nearly ​10 per cent inflation – but it said prices would continue to rise ⁠after and peak at 6.4 per cent in July 2027.

“Food and drink manufacturers have kept ​food prices as low as possible during the energy shock since the closure of ​the Strait of Hormuz … but they can’t do this indefinitely,” FDF Chief Executive Karen Betts said.

“Persistently higher costs of energy, logistics and packaging, compounded by this summer’s extreme heat, mean ​that food prices will rise this year, and we believe that rise will ​be sustained into 2027,” she added.

  • Food inflation is likely to remain significantly above historical averages in ‌the ⁠second half of 2027, with a lower peak but longer plateau than forecast in April, the FDF said
  • Office for National Statistics data showed that food and drink inflation in July fell to 1.3 per cent, its lowest since August 2024
  • The Bank of ​England views food ​and energy prices ⁠as playing a bigger role in determining households’ perceptions of inflation than other categories of goods and services
  • Overall consumer price ​inflation rose to 2.9 per cent in July
  • The BoE forecasts that food ​price inflation ⁠will reach 3.5 per cent by December while CPI will rise to 3.1 per cent
  • Overall food and drink prices had risen nearly 40 per cent since 2020, the FDF said
  • The FDF called on the ⁠government ​to pause plans to restrict the marketing of ​food classed as unhealthy and said higher payroll taxes and tighter advertising and packaging rules had added £2 billion ($2.7 ​billion) in costs last year