Food inflation fell to just 1.7% in the 12 months to June 2026, as supermarkets vied to win shoppers through the door.
The drop in food inflation from 2.2% to 1.7% came as headline CPI inflation fell to 2.6% in June, according to ONS figures.
Falls in the cost of transport and food were the two factors most responsible for the lower rate of inflation. Food and non-alcoholic drinks fell 0.2% in price between May and June.
The figures have come as a boost for new PM Andy Burnham, who this week pledged to bring down the cost of living and improve households’ disposable income.
Sugary products, such as jam, syrups, chocolate and confectionery, were responsible for the largest part of the drop in food prices, but disinflation also came from oils, fats and dairy, and a slower rise in the price of meat and vegetables.
Overall, food made its smallest contribution to headline inflation since August 2024.
BRC economist Harvir Dhillon said the figures reflected “intense competition” from supermarkets, which used promotions to entice shoppers into stores during a warm spell of weather.
“It is vital that the new government prioritises maintaining this momentum and works with retailers to keep prices down, as any reduction in cost burdens will help keep a lid on prices,” he added.
“If retailers are to keep prices affordable for consumers in the long run, the government needs to take practical steps to lower the everyday cost of doing business. Andy Burnham has taken immediate action to ease pressure on household budgets; he must now look to do the same for businesses, by cutting non-commodity charges on energy, and reducing the employment cost burden to help tackle the youth unemployment crisis.”
FDF chief economist Liliana Danila added that it was “positive” to see manufacturers keep food prices stable amid rising input costs.
“What’s become clear is that food manufacturers have worked hard since Russia’s invasion of Ukraine to diversify their supply chains and shore up their resilience against further major supply shocks,” she said.
“We continue to anticipate rising food price inflation as the year goes on, however this is likely to be lower, come later and plateau for longer than the previous inflationary cycle.”
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