The Office for National Statistics (ONS) has published the latest consumer prices index (CPI), which rose by 3.3% in the 12 months to March 2026.
This was up from 3% in the 12 months to February. On a monthly basis, the CPI rose by 0.7% in March 2026, compared with a rise of 0.3% in March 2025.
Food and non-alcoholic beverage prices rose by 3.7% in the 12 months to March 2026, up from 3.3% in the 12 months to February. On a monthly basis, food and non-alcoholic beverage prices rose by 0.3% in March 2026.
According to ONS, there were small upward effects behind the change in the annual rate from the fish, meat, chocolate and confectionary categories. However, these were partially offset by small downward contributions from bread and cereals, and dairy products.
FDF expects pick-up in inflation
Dr Liliana Danila, chief economist at the Food and Drink Federation (FDF), stated: “The clouds are gathering, but the storm has not yet broken on rising food and drink inflation. The war in Iran has delivered a cost shock that is already too large for manufacturers to absorb in full. The impact on prices will take time to work its way through the system, but it’s only a matter of time before it does.
“For manufacturers, long-term contracts with suppliers and retailers mean it can take up to a year for higher costs to be fully passed through. But where products are less processed, or supply chains are shorter, prices will move more quickly. As a result, absent of any Government intervention, we expect a gradual but persistent pickup in food inflation, reaching around 9% – 10% by the end of the year.
“This means we’re in a crucial window for action to limit the impact on shoppers. We’re working with Government to look at the levers they can pull to support food manufacturers now to soften the blow on consumers later in the year.”
Inflation due to cost pressures “already in supply chain”, says IGD
James Walton, chief economist at the Institute of Grocery Distribution (IGD), commented: “Food and drink inflation increased to 3.7% in March, with meat, fish, confectionery and soft drinks the most affected categories. It is likely that much of this is down to cost pressures already in the supply chain, not the immediate impact of events in the Middle East.
“However, the conflict is having an impact on forecourts, where prices at the pump have already risen. Over time, we expect cost pressures for food businesses to rise because food supply is energy intensive, with oil and gas involved at every stage in the process and this will be passed down the supply chain, eventually to food shoppers. Events are already affecting people’s outlook with latest IGD ShopperVista data showing that shopper confidence has dropped to -4, its lowest level since August 2023.
“The current ceasefire may slow further upward pressure but does not reverse costs already incurred and the effects will unfold over months ahead. It will move at different rates in the various categories, with price changes for salads and fruit and vegetables likely to pass through the system more quickly. Our forecasts remain unchanged that average food inflation is likely to exceed 4.8% for 2026 but could briefly peak at 8% if disruption to global energy markets persists, in the most severe but short-lived energy shock scenario.”
BRC foresees food prices “ramping up”
Harvir Dhillon, economist at the British Retail Consortium (BRC), said: “The first signs of inflationary pressure stemming from the conflict in the Middle East began to emerge last month, driven largely by rising fuel prices. Across retail, the picture was mixed. Intense competition pushed clothing and footwear back into deflation, but in the grocery sector, mounting cost pressures saw food inflation creep up. Ahead, if food prices follow a similar trend as seen following the Ukraine-Russia conflict, prices will start to ramp up more notably throughout 2026.
“Although the energy price cap and removal of green levies may provide some near-term relief, inflation will rise over the coming quarters as the full impact of the Middle East conflict filters through. As a more energy intensive sector, supermarkets and their supply chains are likely to be disproportionately affected.
“With food prices set to rise, it is lower income households that will be hit hardest. Government must target support towards these retailers, in particular looking at non-commodity charges which push up the cost of businesses’ energy bills. This will help mitigate the peak in food inflation, reducing the squeeze on households.”
