Soaring food prices for first time in a year in UK

The surge has pushed overall shop‑price inflation into positive territory at 0.4 %, the first annual rise since July 2024, reversing a 0.1 % drop in May. Fresh produce, including fruit and vegetables, saw steeper price rises due to persistently hot, dry weather across Europe, which affected harvest yields.

Rising labour costs also

Wholesale meat prices remain high, compounded by rising labor costs following a 15 % hike in employers’ National Insurance contributions from April, introduced by Chancellor Rachel Reeves in October’s Budget. Despite the Consumer Price Index cooling to 3.4 % in May, the Bank of England projects inflation rising to around 3.7 % by September, driven by elevated food, energy, and labour costs—well above its 2 % target. The Bank of England also maintained interest rates as high as 4.25 ％ in June, though financial markets are pricing in two quarter‑point rate cuts by the end of 2025. Source: FPC.

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