The Office for National Statistics (ONS) has released significant inflation data for May 2025, highlighting a 4.4% increase in food inflation compared to the previous year. This report sheds light on the economic landscape, especially concerning consumer expenses.
Consumer Prices Index (CPIH) Insights
In May 2025, the Consumer Prices Index including owner occupiers’ housing costs (CPIH) increased by 4.0% over the year, showing a slight decrease from 4.1% in April. Month-on-month, CPIH observed a modest rise of 0.2% in May 2025, in contrast to a 0.4% increase during the same month in 2024. These figures suggest a gradual, albeit cautious, economic recovery.
Consumer Prices Index (CPI) Trends
Similarly, the Consumer Prices Index (CPI) recorded a year-on-year increase of 3.4% in the 12 months leading to May 2025, a slight decrease from 3.5% in April. On a monthly basis, CPI also rose by 0.2% in May 2025, down from a 0.3% increase in the same timeframe last year.
Food Price Dynamics
According to the ONS, the most substantial upward contributions to the monthly variations in both CPIH and CPI stemmed from food prices, which surged by 4.4% from May 2024 to May 2025. This marks an increase from 3.4% recorded in April. Notably, May’s inflation figure is the highest since February 2024, when it peaked at 5.0%.
Furthermore, there was a 0.7% monthly rise in food and non-alcoholic beverage prices in May 2025, contrasting with a 0.3% decline observed a year earlier, painting a challenging picture for consumers.
Contribution of Food Categories
The increases in food prices can be attributed to changes in seven out of the eleven categories of food and non-alcoholic beverages. The sugar, jam, syrups, chocolate, and confectionery category contributed the most to these changes. In this segment, prices for chocolate, confectionery, and ice cream showed an upward trend between April and May this year, whereas a decrease was noted during the same period last year. Additionally, there was a small increase in meat prices, reflecting a larger rise this May compared to May 2024.
Expert Commentary
Kris Hamer, director of insight at the British Retail Consortium, commented on these trends, stating, “Headline inflation held at 3.4% as higher bills and new business costs introduced in April continued to filter through into the economy. Worryingly for consumers, the price of the weekly shop rose once again as food inflation continued its upward trajectory, reaching its highest level since February last year. However, there were some bright spots. Deflation persisted in the clothing and footwear category, and within the food category, breakfast items such as eggs, bread, and cereals fell in price on the month, offering some relief.”
Hamer further elaborated, stating, “Since October, retailers have warned that the costs from the Chancellor’s Budget could not be fully absorbed and would inevitably lead to higher prices for shoppers. Food inflation is now above 4% and looks set to increase further later in the year. The Government must now take action to relieve cost pressures retailers are facing. Ensuring no shop pays more under business rates reform would be a meaningful step forward, offering much-needed relief to an industry that continues to see rising prices, job losses, and store closures.”
Dr. Liliana Danila, lead economist at the Food and Drink Federation (FDF), elaborated on the reasons behind rising food inflation, saying, “Food and drink inflation shot up in May 2025, reaching 4.4% compared to 3.4% in April. These figures are being driven by rising energy and ingredients costs. Food manufacturing is an energy-intensive sector, and wholesale gas prices are 7.8% higher compared to last May, as UK businesses face significantly higher industrial energy costs compared to other nations.”
Furthermore, Dr. Danila observed, “Meanwhile, the price of ingredients has also surged. For example, in the last two years, the price of cocoa has tripled, while wholesale butter prices are also 55% higher than last year. Recent and upcoming regulations are also bringing additional costs to manufacturers.”
She cautioned, “With these price increases being coupled with a drop in consumer confidence and a fall in retail sales, food manufacturers have been absorbing rising costs for several years. Recent geopolitical uncertainty is also likely to result in higher pressure on energy and imports, and so unstable manufacturing costs are likely to persist. As a result, we now expect to reach our forecast of 4.8% food and drink inflation for December sooner than anticipated.”
Conclusion
In summary, the latest ONS data underscores significant challenges ahead for consumers and retailers alike. As food inflation continues to rise, stakeholders must closely monitor these trends while advocating for potential policy changes that could alleviate economic pressures on the retail sector.
