Food inflation will soar from three to nine per cent by the end of this year due to the “unprecedented” energy and supply chain shocks caused by the Iran war, a leading association has warned.
The rate of food price growth is currently at 3.3 per cent but will climb to nine per cent by the end of 2026, according to the Food and Drink Federation (FDF), which represents the UK’s 12,000 food and drink manufacturers.
Food retailers had been bracing for potential price increases due to the Iran war but the FDF’s intervention comes after the boss of Sainsbury’s sought to soothe concerns, insisting price rises would only come in the summer.
The FDF has upgraded its food inflation forecast from 3.2 per cent – predicted in September last year – to between 9 and 10 per cent.
It comes after the OECD predicted overall UK inflation would jump to at least 4 per cent in 2026.
The FDF forecast is based on the assumption that the Strait of Hormuz, the crucial shipping passage which has been blocked during the conflict, reopens within two to three weeks.
This suggests food inflation could soar even higher if disruption continues.
Dr Liliana Danila, Chief Economist, The Food and Drink Federation (FDF), said: “The food and drink sector is already feeling the force of this geopolitical shock.
“As one of the UK’s energy intensive industries, manufacturers are facing mounting energy bills, rising transport and packaging costs and disruption across key supply chains.”
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