Viewpoint: Food inflation to persist as taxes bite
28 November 2025Exploring the impact of the 2025 Budget on the food system and new retail food inflation forecasts.
This report analyses the 2025 Budget impact on the food system, focusing on UK retail food inflation forecasts and the implications for businesses and consumers. Drawing on IGD’s industry expertise and multiple data sources, it aims to support better planning and decision-making across the sector. The report includes insight on the following:
Economic outlook
Analysis of productivity, growth, borrowing, and labour market trends based on Office for Budget Responsibility forecasts.
2025 Budget impact
Review of policy changes including National Living Wage increases, business rates, and regulatory reforms including the Employment Rights Bill, EPR and DRS.
Consumer outlook
Examination of shopper confidence, spending intentions, and the taxation impact on household budgets.
Food inflation forecasts
Projections for retail food and drink prices, drivers of inflation, and the anticipated impact of new policies such as the Deposit Return Scheme.
Food sector implications
Exploration of cost pressures across food categories, operational challenges, and opportunities for innovation and resilience.