Food prices rise at third fastest monthly rate in year as warning issued to Rachel Reeves

have risen at their third-fastest monthly rate in the past year, primarily driven by higher costs for butter, cheese, eggs, and bread, according to new data. Other breakfast essentials, such as cereals and coffee, continue to rise in price.

As a result, food jumped to 2.1% in February, up from 1.6% in January, based on the British Retail Consortium (BRC)-NIQ Shop Price Index. Fresh food prices have also increased by 1.5% compared to last year, a significant rise from January’s 0.9%. Meanwhile, ambient food inflation climbed to 2.8% from 2.5% in January.

Overall, shop prices have remained relatively stable, down 0.7% compared to last February.

Non-food products saw a more significant decline, with prices falling 2.1% from a year ago, driven by ongoing discounting in the fashion sector as retailers sought to attract shoppers.

BRC chief executive Helen Dickinson said: “While shop prices remained in deflation in February, prices on the month saw the biggest increase in the last year.

“Breakfast, in particular, got more expensive as butter, cheese, eggs, bread and cereals all saw price hikes. Climbing global coffee prices could threaten to push the morning costs higher in the coming months.”

The BRC has already said it expects food inflation to hit 4% by the second half of the year amid geopolitical tensions and the imminent £7billion increase in costs from the autumn budget.

Ms Dickinson said: “If Government wants to keep inflation at bay, enable retailers to focus on growth and help households, it must mitigate the swathe of costs facing the industry. It can start by ensuring no shop ends up paying more than they already do under the new business rates proposals and delaying the new packaging taxes.”

Mike Watkins, head of retailer and business insight at NielsenIQ, said: “With many household bills increasing over the next few weeks, shoppers will be looking carefully at their discretionary spend and this may help keep prices lower at non-food retailers.

“However, the increase in food inflation is likely to encourage even more shoppers to seek out the savings available from supermarket loyalty schemes.”