Figures from the Office for National Statistics (ONS) show that the rate of inflation in the UK has hit its lowest level since September 2021, with the easing in food price rises the most significant contributor.
The Consumer Prices Index (CPI) rose by 3.4% in February, down from 4.0% in January and well below its peak of 11.1% in October 2022.
Annual food and non-alcoholic beverage inflation eased from 7% to 5%. The latest figure is the lowest rate since January 2022 and follows eleven months of slowing from the high of 19.2% in March 2023 — the highest annual rate seen for over 45 years.
The ONS noted that food prices rose by 0.2% between January and February, compared with a monthly rise of 2.1% a year ago. The annual rates for most types of food products eased last month, with the largest effect coming from bread and cereals, which rose by only 0.3% on the month before, compared with a rise of 2.3% in the same period last year.
Other smaller downward effects came from classes such as meat, vegetables, and milk, cheese and eggs. The overall annual rate eased in 10 of the 11 food and non-alcoholic beverages classes, with oils and fats the only exception.
Easing inflation at restaurants and hotels also helped push down the headline CPI rate, while the largest upward contributions came from housing and household services, and motor fuels.
Karen Betts, CEO of the Food and Drink Federation (FDF), noted that it was “good to see” food and drink inflation continuing to fall. “This reflects prices stabilising across food and drink supply chains, including energy, alongside manufacturers’ continued and sustained efforts to keep prices down for shoppers,” she said.
“Food and drink price inflation should continue to ease in the coming weeks. But some underlying factors are acting against this, from rising labour costs to erratic weather patterns, like this winter’s heavy rainfall across the UK, which is impacting agricultural crop yields.”
Betts also highlighted that the government was making UK food and drink less attractive to invest in with its plans for UK-wide ‘not for EU’ labelling. “This is an expensive and unnecessary policy that will particularly hit small businesses and exports, and we’re urging the government to reconsider,” she said.
“There are good, digital alternatives if the government wants to monitor food movements in the UK, which in time could also be adapted to ease checks with the EU.”
