London Daily

Focus on the big picture.
Sunday, Oct 25, 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
Department for Environment Food and Rural Affairs Implements Stricter Water Quality Regulations for British Rivers
Welsh Government Launches Major Renewable Energy Initiative to Expand Offshore Wind Capacity Along the Coast
Northern Ireland Executive Reaches Final Agreement on Comprehensive Regional Infrastructure Modernization Plan
Office for National Statistics Reports Moderate Increase in British Retail Sales Driven by Autumn Discounts
Scottish First Minister Announces Emergency Housing Strategy to Tackle Severe Homelessness Across Urban Centers
Automotive Industry Leaders in the United Kingdom Urge Government Support for Electric Vehicle Manufacturing Transition
United Kingdom and European Union Initiate High-Level Negotiations on Post-Brexit Defense and Security Pact
National Health Service England Introduces Sweeping Digital Reforms to Reduce Hospital Waiting Lists Nationwide
Chancellor of the Exchequer Outlines Emergency Fiscal Measures to Address Local Government Funding Crises Across England
Bank of England Governor Warns of Persistent Inflation Pressures Impacting Interest Rate Decisions in the United Kingdom
UK Conservative Party Suspends Former Electoral Candidate Following Undercover Investigation
Actors and Writers Condemn British Anti Terror Legislation Targeting Activist Groups and Free Speech
Central Bank and Treasury Monitor Inflation Risks as International Monetary Fund Upgrades United Kingdom Growth Forecast
Storm Boelo Batters British Isles With Eighty Mile Per Hour Winds Causing Widespread Power Outages
British Intelligence Services and Technology Firms Partner to Counter Artificial Intelligence Enabled Cybersecurity Threats
UK Consumer Confidence Falls at Fastest Rate Since Brexit Vote as Cost of Living Intensifies
Chancellor John Healey Prepares Landmark Autumn Budget Focused on Devolution and Fiscal Rules
Northern Ireland Executive Ministers Reach Consensus on Shared Economic Development Priorities to Stimulate Regional Growth in Belfast
Department for Business and Trade Finalizes Conditional Support Package for Advanced Semiconductor Fabrication Facilities in Newport
Welsh Government Unveils Regional Industrial Development Strategy to Attract Green Energy Investment to South Wales Manufacturing Hubs
Foreign Secretary David Lammy Concludes Diplomatic Mission to European Capital Cities to Strengthen Post-Brexit Defense Cooperation
Department for Environment, Food and Rural Affairs Implements Stricter Regulatory Compliance Standards for Water Utilities Across England
Office for National Statistics Reports Moderate Wage Growth Stabilization and Resilient Employment Figures Across the United Kingdom
Scottish Government and Trade Union Representatives Reach Tentative Pay Agreement for Public Sector Transport Workers in Edinburgh
National Health Service England Announces Emergency Capital Funding Allocation to Reduce Winter Emergency Department Bottlenecks
Bank of England Monetary Policy Committee Signals Cautious Approach to Interest Rate Reductions Amid Persistent Inflation Pressures
British Prime Minister Keir Starmer and Treasury Officials Finalize Urgent Fiscal Adjustments Ahead of Upcoming National Budget
Tour de France Organizers Confirm Historic Grand Depart Featuring Edinburgh and Yorkshire Stages
National Cyber Security Centre Issues Urgent Alerts Following Global Security Vulnerability in Core Programming Software
Independent Energy Analysts Warn Great Britain Faces Highest Winter Power Tariffs in Europe
Major British Defense Contractors Commit to Delivering Forty Thousand New Apprenticeships and Training Placements
New Bradford Railway Station Infrastructure Project Approved to Transform Regional Transit Connectivity Across Northern England
Welsh Infrastructure Stakeholders Press Government for Accelerated Local Sourcing in Military and Uniform Manufacturing
Scottish Council Governance Crisis Triggers High-Court Legal Challenge Over Leadership Ouster Bid
High Street Bakery Chain Greggs Announces Major Factory Closures and Seven Hundred Job Cuts
Automotive Manufacturer Jaguar Land Rover Advances Advanced Defense Technology Partnership with European Allies
Treasury and Bank of England Officials Signal Persistent Concern Over Inflation-Driven Interest Rate Path
International Monetary Fund Upgrades United Kingdom Growth Forecast While Issuing Inflation Warnings
National Health Service Leaders Warn of Severe Capacity Pressures as Early Winter Respiratory Infections Surge
Government Issues Emergency Resilience Guidance Advising All British Citizens to Stockpile Essential Supplies
United Kingdom Private Sector Growth Beats Expectations in October Driven by Resilient Services and Manufacturing
Barclays to Cut Five Thousand Jobs in Major Artificial Intelligence Adoption and Cost-Cutting Overhaul
Piper Tomahawk Aircraft Crash Near Drymen in Stirling Claims Two Lives as Investigators Deploy
North Sea Transition Authority Approves Jackdaw Gas Field Production After Ministerial Authorization
Government Injects One Hundred and Forty Million Pounds to Expand Urgent Care Ahead of Winter Crisis
Department of Health Warns Further Pay Rises Will Derail National Health Service Waiting List Targets
Major Environmental Emergency Declared in South Wales Following Aerospace Kerosene Spill
Tank Barrel Production Returns to Britain as Defence Contractors Accelerate Domestic Rearmament
Government Approves Controversial Jackdaw Gasfield Development in the North Sea
National Health Service Maternity Safety Review Condemned Over Flawed Artificial Intelligence Integration
×