London Daily

Focus on the big picture.
Tuesday, Nov 03, 2026

UK inflation rises at fastest rate for 40 years as food costs jump

UK inflation rises at fastest rate for 40 years as food costs jump

Prices are continuing to rise at their fastest rate for 40 years with food costs, particularly for bread, cereal and meat, climbing.

UK inflation, the rate at which prices rise, edged up to 9.1% in the 12 months to May, from 9% in April, the Office for National Statistics (ONS) said.

Fuel and energy prices are the biggest drivers of inflation, but the ONS said food costs had pushed it up further.

Workers and unions are pushing for pay rises to cope with higher prices.

But the government has warned against employers handing out big increases in salaries over fears of a 1970s style "inflationary spiral" where firms hike wages and then pass the cost on to customers through higher prices.

Currently, inflation is at the highest level since March 1982, when it also stood at 9.1% and the Bank of England has warned it will reach 11% this year.

Inflation is the pace at which prices are rising. For example, if a bottle of milk costs £1 and that rises by 5p compared with a year earlier, then milk inflation is 5%.


In a BBC-commissioned survey of more than 4,000 people, 82% said they thought their wages should increase to match the rising price of goods and services.

Households were hit by an unprecedented £700-a-year increase in energy costs in April, and fuel price rises in June mean it costs more than £100 to fill an average family car with petrol.

Rail workers walked out on Tuesday causing severe disruption, with further strikes planned for Thursday and Saturday in a dispute over pay, jobs and conditions.

The Rail, Maritime and Transport union is calling for a pay rise of 7%, while employers have offered a maximum of 3%.

Unison, which represents public sector workers, accused ministers of "living on another planet" over "talks of public sector pay restraint".

"Under-pressure health, care, school and council services desperately need staff to be given a pay boost that matches runaway prices," assistant general secretary Jon Richards said.

The biggest teachers' union is also warning of potential industrial action over pay.

The National Education Union has criticised government proposals for a 3% pay increase for most teachers in England, and called for an "inflation-plus increase for all teachers".

But Dominic Raab told the BBC's Today programme: "We have got to stop making the problem worse by fuelling pay demands that will only see inflation stay higher for longer and that only hurts the poorest the worst."

The ONS said rising prices for food and non-alcoholic beverages helped fuel inflation in May.

Russia's war in Ukraine has severely restricted wheat and maize supplies, which are used to make bread and cereals, from two of the world's biggest exporters.

Ukraine is also a major producer of sunflower oil, meaning the costs of alternatives have also climbed.

Market research firm Kantar has forecast that the average annual grocery bill in the UK is set to rise by £380 this year.

Supermarket Asda told the BBC some shoppers are setting £30 limits at checkouts and petrol pumps, with customers putting less in their baskets and switching to budget ranges.


Grant Fitzner, chief economist at the ONS, said "widespread food price rises" meant the cost of goods leaving factories had risen at their fastest rate in 45 years in May, with the cost of raw materials at the highest on record.

But he said the steep rises in food and record high petrol prices in May had been stemmed by the price of clothes rising less than they did this time last year, along with a drop in computer game costs.

The ONS also revealed average UK house prices increased by 12.4% in the year to April, with average prices now £281,000, £31,000 higher than this time last year.

Richard Lim, chief executive of consultancy Retail Economics, said after families paid for essentials, "the amount of spare cash left over to spending on days out, socialising and other treats is shrinking at an astonishing rate".


'We are not doing as much fun stuff'
Georgia looks for low-cost ways to have a day out, preferably not travelling by car


Mum Georgia, from Birmingham, said she was having to cut back on trips with her daughter Harper-Faye as a result of prices rises.

"I haven't got the money to go to Sea Life Centres and stuff. That's like, £25 a ticket," said she said. "I can't go out as much as I used to, not a chance. I can't afford it."

Responding to the latest inflation rate, Chancellor Rishi Sunak said the government was "using all the tools at our disposal to bring inflation down and combat rising prices".

The government has provided a package of measures, worth £15bn in total, to help people cope with soaring prices.

But Rachel Reeves, Labour's shadow chancellor said the country needed "more than sticking plasters to get us back on course - we need a stronger, and more secure economy".

Liberal Democrat treasury spokesperson Christine Jardine called for a cut in VAT, adding: "This chancellor has hiked taxes time and time again, refusing to slash them to help with the cost of living emergency."


There's no respite from the relentless rise in prices. While at least the rate of rise in inflation appears to have slowed, this is just a pause for breath. Further records in petrol prices and a renewed surge in the price of internationally traded gas after a fire at a key US gas terminal, mean a hot summer, and tricky autumn.

Right now we are also seeing the impact of a notable fall in sterling, compounding the global inflationary pressures, and helping to explain why UK inflation is higher than the rest of the G7.

Inflation this high is disastrous for the personal finances of millions of households, especially as food prices are unarguably surging. "Squeeze" doesn't quite capture how some working families are seeing their entire disposable income wiped out by monthly energy direct debits, or turning up at supermarkets asking the cashiers to stop the till at £30 or £40.

The Bank of England may not see this data as a reason to "act forcefully" which many see as code for a half a per cent rise in August. They will continue to watch the evolution of wage settlements. While there is little evidence of a spiral in wages and prices so far, it is clear we are at a critical moment for the jobs market.

With vacancies at record levels, unions see a one-off opportunity to increase wages, and will continue to push for double digit rises, for example rejecting Rolls Royce's £2,000 cost of living payment. Employers including the government will resist, but workers may find some wind in their sails in negotiations.

One way to try to control how fast prices are rising is to raise interest rates. The aim of this is to increase the cost of borrowing and encourage people to borrow and spend less, and save more.

In a bid to stem the pace of soaring prices, the Bank of England recently increased UK interest rates from 1% to 1.25%.

Newsletter

Related Articles

0:00
0:00
Close
House of Lords Advances Representation of the People Bill to Modernize Electoral Law Ahead of General Election
Financial Markets and Private Equity Assess Tax and Corporate Realignment Following Recent Chancellor Budget Adjustments
Justice Committee Warns Legal Aid Is a Service in Managed Decline Due to Inadequate Government Funding Responses
Royal Navy Intercepts Russian Intelligence Vessel and Warships Across Intensive North Sea Operations
Business and Trade Committee Slams Government Policy on China as Fragmented and Lacking Strategic Direction
Home Secretary Shabana Mahmood Softens Immigration Plans Following Intensive Cabinet Backlash Over Settlement Timelines
Automotive Industry Data Reveals Continued Acceleration in Battery Electric Vehicle Registrations Across British Dealerships
High Court of England and Wales Rules on Landmark Legal Challenge Regarding Local Government Housing Mandates
Department for Energy Security and Net Zero Approves Expanded Offshore Wind Infrastructure Along Scottish Coastline
Competition and Markets Authority Launches Broad Investigation Into Artificial Intelligence Infrastructure and Cloud Partnerships
United Kingdom and European Union Launch High-Level Preparations for Bilateral Defense and Security Summit in Brussels
National Health Service England Unveils Emergency Workforce Reforms to Alleviate Winter Accident and Emergency Pressures
Chancellor Rachel Reeves Finalizes Autumn Budget Adjustments to Meet Fiscal Rules and Fund Public Services
Bank of England Prepares for Interest Rate Decision Amid Rising Bond Yields and Inflationary Pressures
House of Lords Begins Detailed Legislative Scrutiny of Representation of the People Bill and Cyber Security Laws
Metropolitan Police Detain More Than Three Hundred Individuals Following Large-Scale Demonstration Outside London Embassy
Home Office Prepares Stricter Residency Rules Requiring Vulnerable Migrants to Wait Decade for Settlement Rights
Professional Mental Health Bodies Demand Statutory Regulation for Counsellors and Psychotherapists
National Grid Confirms Construction of Britain's Largest Electrical Substation to Power Teesside Data Centre
Prime Minister Keir Starmer Travels to Samoa for Commonwealth Summit Amid Debates on Economic Cooperation and Reparations
Home Office Implements Enhanced Digital Border Controls and Visa Processing Systems at Major Airports
Office for National Statistics Reports Stable Employment Participation Rates Across Regional Labor Markets
Department for Business and Trade Announces Strategic Partnership to Secure Critical Mineral Supply Chains
Scottish Government Unveils Regional Economic Development Strategy to Boost Advanced Manufacturing in Glasgow and Dundee
Treasury Officials Review Taxation Frameworks and Capital Gains Rules Ahead of Autumn Budget Disclosures
National Health Service Leaders Warn of Winter Capacity Pressures Across Acute Care Facilities
Bank of England Prepares for Key Interest Rate Decision Amid Sticky Inflation and Fiscal Policy Pressures
Home Office Expands Border Security Operations and Intelligence Sharing With European Partners
Office for National Statistics Reports Modest Retail Sales Growth Ahead of Crucial Christmas Trading Season
Welsh Government Unveils Strategic Plan to Boost Regional Technology Innovation and Digital Skills Training
Department for Environment Food and Rural Affairs Implements New Agricultural Subsidies Framework for English Farmers
Scottish First Minister John Swinney Announces Major Regional Infrastructure and Green Energy Investment Strategy
National Health Service Leaders Warn of Severe Winter Pressures and Mounting Accident and Emergency Backlogs
Bank of England Monetary Policy Committee Signals Cautious Interest Rate Path Amid Persistent Services Inflation
Chancellor of the Exchequer Rachel Reeves Finalizes Autumn Budget Framework Aiming to Close Public Sector Fiscal Gap
Department for Science, Innovation and Technology Prepares Enhanced Artificial Intelligence Safety and Cyber Defense Frameworks
United Kingdom Government Expands International Sanctions Framework Against Russian Shadow Fleet and Financial Enablers
Institute of Directors Reports Sharp Post-Budget Drop in Business Confidence Despite Long-Term Investment Intention Shifts
Chancellor John Healey Defends Sweeping Fiscal Adjustments and Household Support Packages Following Autumn Budget
Parliamentary Petitions Committee Schedules Major Legislative Debates on Special Educational Needs and Non-Stun Meat Labelling
Regional Devolution and Good Growth Fund Frameworks Reshape Local Government Funding Across English Regions
Loughborough University Economic Analysts Highlight Substantial Uncertainty Surrounding Public Sector Efficiency Savings
British Legal Sector Drives Sixty Billion Pounds in Annual Economic Output While Employing Over Half a Million Professionals
Law Society Welcomes New Better Regulation Executive While Pressing for Long-Term Legal Aid Funding Reform
Metropolitan Police and Security Services Heighten Operations Across London Ahead of Large-Scale Public Demonstrations
Bank of England Economists Scrutinize Corporate Tax Adjustments and Public Sector Borrowing Pressures
Chancellor John Healey Defends Autumn Budget Tax and Spending Allocations Following Intense Parliamentary Scrutiny
Department for Environment, Food and Rural Affairs Implements Strict Water Quality Monitoring Rules Following Severe Rainfall and Flooding
Welsh Government Unveils Comprehensive Regional Housing Strategy to Address Rural Affordability and Homelessness Pressures in Cardiff
Office for National Statistics Reports Slowing Consumer Price Inflation and Steady Retail Performance Across United Kingdom Markets
×