For the first time in over two years, food prices in the UK have experienced a decline, signaling a reduction in inflation within this sector.
Despite this decrease, the overall inflation rate in the UK remained steady at 4% over the year leading up to January, as the diminishing food costs were counterbalanced by escalating energy expenses.
The Office for National Statistics (ONS) reported a 0.4% monthly decrease in the prices of food and non-alcoholic beverages, the first drop since September 2021.
The yearly inflation rate for food and beverages also saw a decline, moving from 8% in December to 7% in January, continuing a trend of decelerating increases for the tenth consecutive month.
Key contributors to this trend included lower prices for bread and cereals, particularly items like cream crackers, sponge cake, and chocolate biscuits, along with reductions in the prices of crisps, cooking sauces, and instant coffee.
Despite the recent drop, food prices are still significantly higher than they were two years ago, having increased by approximately 25% from January 2022 to 2024, a stark contrast to the 10% rise observed over the preceding decade.
The inflation rate for alcohol and tobacco also decreased slightly, from 12.8% in December to 12.2% in January.
However, Balwinder Dhoot, a director at the Food and Drink Federation, cautioned that ongoing challenges in the Red Sea and rising shipping costs could soon impact energy and food prices again.
“The extent of this impact hinges on the duration of ship diversions from the Suez Canal and any escalations in the Middle East.”
“We are also seeing increased regulatory costs being put on industry by the government. To support food and drink manufacturers and help hard-pressed shoppers, the government must reduce unnecessary regulatory burdens and urgently reassess costly ‘not for EU’ labeling requirements for food sold in Great Britain.”
