UK food prices set to remain more expensive in long term

This long-term rise is due to global events such as the Middle East conflict and the El Nino weather pattern, according to researchers at the Energy and Climate Intelligence Unit (ECIU).

Their latest report warns that even when food prices rise due to big shocks, those increases rarely reverse fully, leaving households facing permanently higher costs.

Chris Jaccarini, food and farming analyst at the ECIU, said: “Shoppers feeling that prices are on a never-ending escalator upwards is borne out by the data.

“War and extreme weather are increasingly pushing up the cost of the weekly shop with the latest conflict in the Middle East driving up the price of oil, gas and fertiliser used to grow, ship and process food.”

The “rocket and feathers” effect, where food prices “shoot up like rockets but drift down like feathers,” helps explain why prices remain so high even as some contributing crises fade.

Using more than 30 years of UK data, the ECIU found that on average, six months after a major food price shock, only 1 per cent of the original price increase unwinds.

After one year, just 5 per cent drops off, and after two years, it is only 7 per cent.

In terms of wages, just 35 per cent of the affordability shock is gone after two years.

Mr Jaccarini said: “We’ve had three of the worst harvests on record in the past five years and next year is shaping up to be the hottest globally.

“The only way to stop the growing risk of floods and droughts is to reach net zero and bring the climate back into balance.

“That means cutting our reliance on oil and gas, which would also help shield food prices from the volatile global markets that have helped drive the cost-of-living crisis.

“As the data shows, once prices are up, they’re up – prevention is the only cure.”

Henry Dimbleby, former lead of the government’s National Food Strategy, echoed the concerns.

He said: “Food inflation has been brutal – and it will keep biting unless we tackle the underlying causes.

“That’s because our food system is tightly tied to energy, fertiliser and transport costs – and we’ve built too little resilience into supply chains and production.

“As climate change and energy volatility worsen, shocks are likely to become more frequent and more severe.

“Unless we cut our reliance on fossil fuels, diversify supply chains and build real resilience into food production, higher food prices will become a lasting feature of daily life, with the heaviest burden falling on those least able to bear it.”

Food prices are already more than 40 per cent higher than in mid-2021, according to the report.

A previous report by the think tank suggests that UK food prices are on track to be 50 per cent higher by November compared to levels at the start of the cost-of-living crisis in mid-2021.

For the lowest fifth of earners with children, a healthy diet now requires spending around 70 per cent of disposable income after housing costs.

Anna Taylor, executive director of the Food Foundation, said: “What’s striking here is the lasting impact of these shocks.

“Once food prices go up, they rarely come properly back down and that means for millions of people in Britain food becomes harder and harder to afford, and food insecurity continues to remain unacceptably high even after the headlines have moved on.

“If we are serious about making food more affordable, we have to focus on reducing the impact of the next shock, not just responding after the damage is done.

“The UK needs to stop lurching from crisis to crisis and put a long-term plan for food resilience on a statutory footing.

“A Good Food Bill would help protect families, farmers and food businesses alike by building a more resilient food system and helping to ensure that everyone can afford and access healthy food, even as climate impacts and geopolitical disruption become more frequent.”