Food inflation fell to 4.5% in the 12 months to September 2025, despite overall consumer price rises holding steady on August’s levels at 4.1%.
The fall in food and non-alcoholic drinks inflation made the greatest contribution to cooling overall inflation levels, alongside lower prices for recreation and culture activities, according to ONS figures. September marks the first month since March 2025 for annual figures for food prices to cool.
Transport inflation – including an increase in air fares – was the largest upward driver of prices.
“Food inflation is expected to remain high into 2026 as inflationary pressures from the last budget continue to filter through, something now being seen in the price of clothing and footwear,” said BRC director of insight Kris Hamer.
While the 12-month price tracker showed a 4.5% increase, monthly statistics actually showed a 0.2% drop in food prices in September – the first month-on-month drop since May 2024.
The ONS highlighted vegetables, dairy – in particular cheese – bread, cereals, fish, and non-alcoholic beverages as having caused the slight drop in prices.
“Such tiny movements won’t make a huge difference to the overall bill when people reach supermarket tills,” warned AJ Bell head of financial analysis Danni Hewson.
“Everyone’s inflation experience is different and month-to-month changes must be viewed cautiously, especially when we know that farmers have had to deal with a dry and difficult summer. Inflation on goods also ticked up a bit and factory gate prices rose to 3.4%,” she said.
“But the impact of those increased labour costs could be beginning to wash through, and inflation is expected to have peaked and should now gradually ease back towards the Bank of England’s 2% target – though that is likely to take a significant amount of time.”
Hamer added that despite the slightly better prices, the Chancellor should use the upcoming budget – on 26 November – to “tackle rising prices head on”.
“Retailers, already operating on tight margins, have been hit with £7bn in additional taxes this year alone — costs they simply can’t absorb.
“The government must use what levers it has to hold back the rising tide of inflation. Reform of business rates – delivering a meaningful cut for retailers with no shop paying more – would drive and help deliver better value for customers.”
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