UK food inflation forecast 2026-2027
Topics
FDF’s food inflation forecast report explores the key drivers behind rising inflation, explains why we have revised our previous prediction, and sets out what we expect over the coming year.
Our latest forecast predicts that food and non-alcoholic inflation will reach 3.9% in December 2026, putting the inflation rate over 2026 at 2.8%. Looking ahead, we predict inflation to reach 5.5% in 2027, peaking at 6.4% in July 2027. The slowdown in food inflation in recent months has been surprisingly strong, but this trend is likely to reverse as manufacturers face rising costs across energy, ingredients, transport, logistics and packaging.
The Middle East conflict has pushed gas prices to more than double their February 2026 levels, while droughts and El Niño have driven sharp increases in agricultural commodity prices. Increased tax and regulatory burdens are also adding to the pressure facing food and drink manufacturers.
What's driving food inflation in 2026 and 2027?
Our forecast examines the factors expected to drive the next phase of food and drink inflation, and explores what they mean for manufacturers, consumers and prices across the supply chain.
- Energy costs
- Ingredient costs
- The impacts of drought in the UK and El Niño
- Geopolitical events, including the Russia-Ukraine war and conflict in the Middle East
- Packaging costs
- Labour costs
- The tax and regulatory burden
- How input cost increases feed through to consumer prices
Read the full report for detailed analysis of these drivers and their expected impact on inflation over the coming year.
Food inflation forecast
Inflation peak set to come later than expected
Following the 2022 energy shock, many manufacturers extended their hedging horizons, delaying the impact of higher energy and commodity costs for consumers. At the same time, pressure on household budgets, intense competition and retailer resistance to price increases have limited manufacturers’ ability to pass on higher costs. As a result, inflation is likely to arrive later and persist for longer, as cost pressures feed through more gradually following the conflict in the Middle East, compared to the previous shock.
Current food inflation forecast
Annual food inflation reached 1.3% in July 2026, the lowest rate since September 2021. We expect inflation to start accelerating from August 2026, reaching 3.9% by December and averaging 2.8% across the year. For 2027, we forecast food and non-alcoholic drink inflation to reach 5.5%, peaking at 6.4% in July.
Risks to the forecast
With more than 12,000 businesses competing for market share, food and drink manufacturers are extremely reluctant to raise prices, as even small increases risk losing customers to competitors. As a result, businesses absorb cost increases wherever possible. As well as this, if households reduce their food purchases or if competition for grocery market share intensifies further, inflation could come in below our forecast.
Conversely, the conflict in the Middle East, the escalating Russia-Ukraine war and extreme weather events could increase cost pressures and push inflation above our forecast.
About the Research
The report is based on FDF economic analysis incorporating inflation data, commodity market data, energy market information, industry survey findings and publicly available economic sources. Further methodology details are available in the full report.
Who’s this for?
The report is particularly relevant to food and drink manufacturers, retailers, policymakers, investors and supply chain leaders seeking to understand the outlook for inflation and industry resilience.
Author Information
Organisation
Food and Drink Federation (FDF)
Author
- Dr Liliana Danila, Chief Economist, Food and Drink Federation
