Back on 28th August, we shared our blog Food Prices Hit 18 Month High. Fast forward a few weeks, and unfortunately, the picture hasn’t brightened. Prices are still climbing and for many households, the squeeze is only getting tighter.
New figures show that food prices in the UK jumped 5.1% in August, marking the fifth month in a row they’ve gone up – and at the fastest pace since early last year.
The main culprits? Everyday staples like beef, butter, milk, chocolate, and even coffee. Meanwhile, overall inflation across the economy stayed at 3.8%, the same as July, thanks to slower growth in things like air fares. But that still leaves prices running way above the Bank of England’s 2% target.
What’s Driving the Increases?
A big part of the story is that supermarkets are passing on their own rising costs. The government’s hikes to the minimum wage and National Insurance Contributions (NICs) have pushed up what businesses pay their staff, and many have simply passed those costs on to shoppers.
Compared to our neighbours, the UK is an outlier. In August, inflation was just 0.8% in France and 2.1% in Germany, while British families are paying far more at the tills.
Here are some of the sharpest price rises over the past year:
· Beef & veal: +24.9%
· Butter: +18.9%
· Chocolate: +15.4%
· Coffee: +15.4%
· Whole milk: +12.6%
And the squeeze feels even tighter when you consider that average wages only rose by 4.7%. In other words, food bills are climbing faster than pay packets.
What Politicians Are Saying
Chancellor Rachel Reeves has admitted families are struggling, saying the economy “feels stuck” for many people. She’s promised to bring costs down, but critics argue that some of Labour’s own tax policies are making inflation worse.
The Bank of England, which sets interest rates, is stuck in the middle. It’s already cut rates five times since last summer but may have to keep them steady for now if inflation doesn’t budge.
How Small Businesses Are Coping
The numbers aren’t just abstract, they’re hitting small businesses too. Take Coosh Bakery in Nottingham, where co-founder Tom Egan says butter and chocolate prices have eaten into their bottom line.
Butter costs have soared by 50% in a year, while cocoa prices have more than doubled thanks to poor harvests in Ghana. Add in higher National Insurance costs, and the bakery has had to put plans for new equipment on hold.
“It’s stung a little bit,” Egan admits, echoing what many small business owners are feeling.
What’s Next?
The Bank of England expects inflation to peak at 4% in September before slowly easing. But food prices could climb higher toward the end of the year before things get better.
For now, households are caught between higher bills and pay that isn’t keeping pace. Whether it’s your weekly food shop or your favourite local bakery, the cost-of-living crunch is showing up everywhere.
