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Food and drink inflation rate drops below 2% for first time since 2021

By William Dodds

- Last updated on GMT

The inflation rate has fallen 14 months in a row. Credit: Getty / Jacobs Stock Photography Ltd
The inflation rate has fallen 14 months in a row. Credit: Getty / Jacobs Stock Photography Ltd
Prices of food and non-alcoholic beverages rose by 1.7% in the 12 months to May 2024, according to new figures from the Office for National Statistics (ONS).

At 1.7%, this is the lowest annual rate of inflation for F&B since October 2021, after falling from 2.9% in April.

After reaching a recent high point of 19.2% in March 2023, the rate has fallen in 14 consecutive months.

Between April and May prices fell by 0.3%, compared with a monthly rise of 0.9% a year ago.

The annual rate eased in nine of the 11 food and non-alcoholic beverages classes measured by the ONS, with the exceptions being ‘oils and fats’ and ‘milk, cheese and eggs’.

‘Bread and cereals’, ‘vegetables’ and ‘sugar, jam, syrups, chocolate and confectionery’ were the primary downward effects with prices falling between April and May in each instance.

In response, Shore Capital director Clive Black said that given the inflation rate was at 18.4% in May 2023 “the fact that inflation remains in the system is quite remarkable and a manifestation of the material cost pressures evident”.

“The unseasonal weather is a deflationary force, as some crops likes leaf salad and strawberries do not move and require short-term discounting, any notable upturn in the weather, noting very favourable July/August comparatives would see that short-term phenomenon, partially evident in the April-May movement, unwind,”​ Black added.

Meanwhile, CEO at the Food and Drink Federation (FDF) Karen Betts commented: “It’s encouraging to see food and non-alcoholic drink price inflation continue to fall, which is welcome respite for households and important for business recovery."

Betts continued by calling on politicians currently campaigning ahead of the general election to place more emphasis on the importance of a strong and sustainable food system.

"With agricultural commodity prices and energy costs rising once again, parts of the food and drink supply chain remain vulnerable and there’s little slack to cope with the impact of extreme weather events on harvests or further rises in shipping costs," ​she said.

"It’s crucial that the next government works closely with our sector to ensure sufficient investment to guarantee the UK’s food security alongside economic growth. With the right incentives and the right regulation, our sector – the largest manufacturing sector in the country – should be a powerhouse for science and innovation, good jobs and community prosperity."

In other news, Bidcorp UK has completed the acquisition of ice cream manufacturer Northern Bloc.

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