The latest report from the Institute of Grocery Distribution (IGD) has forecast that food inflation may be set to hit its highest level in more than 20 years.

According to IGD, the rise in the cost of essential food items is likely to reach a peak of up to 15% this summer and will last much longer than initially predicted.

The average monthly spend on groceries for a typical family of four will reach £439 from January 2023 – a significant increase from £396 in January 2022.

IGD warned that the UK economy is facing its strongest period of inflationary pressure since the 1970s. It also expects food inflation to persist for longer than official forecasters due to several factors, including the impact of the war in Ukraine, pre-existing supply chain challenges and “the limited effectiveness” of monetary and fiscal policy.

The strongest inflation pressure is expected to come from meat, cereal products, dairy, fruit and vegetables. Products that rely on wheat for feed, such as white meats, are likely to see prices increase substantially in the short term.

IGD predicts that the acceleration in food inflation is likely to last until mid-2023. The report also highlights the predicted rate of inflation is likely to push the economy into recession or, at least, into stagflation.

Inflation impact

James Walton, chief economist, IGD, said: “From our research, we’re unlikely to see the cost-of-living pressures easing anytime soon. This will undoubtedly leave many households – and the businesses serving them – looking to the future with considerable anxiety. If average food bills go up 10.9% in a year, a family of four would need to find approximately £516 extra per year. We are already seeing households skipping meals – a clear indictor of food stress.

“We expect the mood of shoppers to remain bleak for the foreseeable future as they are impacted by rising inflation and a decline in real wages. Shoppers are likely to dial up money-saving tactics as far as possible.”