Food and drink Federation updates inflation projections for 2025 to new high
FOOD and drink inflation is now projected to hit a new high by the end of 2025, according to the latest food and drink inflation forecast from The Food and Drink Federation (FDF).
Following several months of high food inflation rates, The FDF has upgraded its food and non-alcoholic beverages drink inflation forecast to reach a new high of 5.7% by December. This is up from the firm’s previous forecast of 4.8%.
Dr Lilliana Danila, lead economist at The FDF, said: “Food and drink inflation has been climbing steadily all year, with no sign of easing. Looking at the longer-term picture, today’s prices are steeper than anything in recent decades.
“The five-year average is running at more than double the rate seen between 1990-2010.”
The FDF has said that, between July 2020 and July 2025, food and drink prices across the UK have risen by 37%. This figure is significantly higher than overall UK inflation for the same time period, which sat at 28%.
In particular, milk, cheese, sugar and flour have all seem some steep increases during the five year period:
Jan 2020 price July 20205 price & increase Whole milk £1.15 per four pints £1.68 per four pints 46% Sugar 72p per kg £1.12 per kg 56% Cheese £6.90 per kg £9.01 per kg 31% Flour 68p per 1.5kg 81p per 1.5kg 19%
The FDF said these rising prices were initially down to surging production costs, as agricultural commodity prices rose by 51% and UK gas prices quadrupled. However, despite most of the costs stabilising in 2024, food and drink inflation has continued to remain at well above the average rate throughout 2025.
The rate of rising food prices in the UK has also outpaced other European countries. By the end of July, UK food inflation sat at 4.9%, far higher than France’s 1.8%, Germany’s 2.7% or Spain’s 2.8%.
As such, The FDF has called on the UK Government to support more food and drink manufacturers and help bring more investment into the sector and not stifle it any further through taxation.
Karen Betts, chief executive at The FDF, said: “UK food inflation is running persistently high. It’s an outlier against comparable European economies and it’s persisting in the absence of energy or commodity shocks.
“The costs are such that companies can no longer absorb them and are having to pass at least some of them onto consumers.
“As this autumn’s budget looms, it’s critical that the government does not add further to the already high costs of regulation in our sector. We’ve been hit by rising taxes, employment costs and a new packaging tax.
“We’re calling on government to help us turn this tide by partnering with industry to attract investment, accelerate productivity growth, boost skills, and grow exports across our sector.
“This will help counter inflation and secure a more resilient future for UK food and drink manufacturing.”
