Food inflation falls for second consecutive month
21 June 2023
Food inflation has slowed for the second consecutive month, the first time this has happened since the Ukraine war began.
- Business insights & economics
The ONS confirmed food inflation came down slightly to 18.4% from 19.1% last month, with prices for food and non-alcoholic drinks rising in May 2023 - but by less than in May 2022.
Elsewhere it was bad news for mortgage owners with general inflation remaining at 8.7% and 'core' inflation - which strips out energy and food costs - is at the highest rate since 1992, meaning it is likely the Bank of England will raise interest rates.
Karen Betts, the Chief Executive of the Food and Drink Federation said:
“It’s encouraging to see food and drink price inflation starting to drop off, and we hope it will continue to fall over the coming months.
“However, we know too how concerned households remain about the costs of the weekly shop, and food and drink manufacturers are continuing to drive down costs wherever they can. But the fact remains that the cost of ingredients, energy, labour, packaging, logistics and other inputs remain stubbornly high, and still some way above pre-pandemic levels.
“High input costs and a challenging regulatory environment are taking their toll on the sector too, with insolvencies on the rise, now more than double their pre-pandemic level for our sector, and overall output shrinking. Food and drink manufacturers are having to cancel or pause planned investments, restructure their businesses, leave vacancies unfilled, and reduce production - all of which is going to have a negative impact on future growth. We’re urging the government to work with us to mitigate these issues – to simplify and reduce the costs of regulation and to help create the conditions for growth – to help avoid long term scarring in our sector.”
Resource: Economic insights
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