Bulletin: Sharp increase in food inflation in July
21 August 2025Featuring food inflation, GLP1s, obesity, UK-EU border checks and the energy price cap.
A sharp increase in food inflation in July
ONS has announced that CPI food price inflation increased from 4.5% last month to 4.9% this month, the highest level since February 2024. Beef, orange juice, coffee and chocolate contributed to the increase. This is exactly in line with IGD’s latest food inflation forecasts.
“All items” inflation in July 2025 was 3.8%, as measured by the CPI method, up from 3.6% in June.
See our latest article – Sharp step-up in food and drink inflation in July.
IGD opinion
Food and drink inflation is rising sharply, adding pressure to household budgets and shopper confidence. While services remain the biggest inflation driver, food pricing has emotional weight, prompting caution and reduced spending. IGD expects this trend to ease soon unless new cost pressures emerge, such as weather-related supply issues.
UK halts extra border checks ahead of EU Deal
The UK Government has cancelled planned new border checks on live animals and certain agrifood imports from the EU and Ireland. This move anticipates a new UK-EU sanitary and phytosanitary (SPS) agreement, aimed at reducing trade friction and costs. While some risk-based inspections will remain, most goods will bypass routine checks. Biosecurity Minister Baroness Hayman said the deal will “boost British businesses” and simplify food trade with the EU as part of the government’s Plan for Change.
Increased access to GLP1s
Under new draft guidance from NICE, millions more people in the UK are expected to gain earlier access to GLP-1s. While the move is a major step forward, GLP-1s alone won’t fix the UK’s health and nutrition challenges - broader changes in diet and food environments are still urgently needed. See also IGD insight reports on GLP1s on Retail Analysis and ShopperVista.
Energy price cap predictions
Cornwall Insight has predicted that Ofgem will increase the energy price cap by 1% for a typical dual fuel household in October from £1,720 to £1,737. Ofgem is due to confirm the latest price cap on August 27.