Food price rises slow as UK inflation remains at 3.8%

Food prices are rising at the lowest rate in more than a year, with inflation unchanged for the third month in a row.

According to official figures, the inflation rate in the UK remained stable at 3.8% in September; This rate was below expectations.

ONS chief economist Grant Fitzner noted that the cost of food and non-alcoholic drinks had fallen “for the first time since May last year” but the prices of items such as red meat and chocolate continued to rise.

Chancellor Rachel Reeves said she was “not happy with the figures” on inflation overall, while shadow chancellor Mel Stride said it was “increasing the cost of living”.

The inflation rate of food and non-alcoholic beverages decreased from 5.1% in August to 4.5% in September.

This means prices continue to rise at a slower pace for shoppers; a small difference that may not always be easy to spot in the supermarket.

Kayleigh Brannan, mother of baby Hadley, told the BBC that she had noticed that meat prices in particular had increased and that Hadley had now started eating solid foods and expected her expenses to increase.

“The situation is not too bad at the moment, but you can see that the prices are increasing,” he said.

She added: “Maternity pay is not enough. You still have the same bills, you still have to pay the mortgage… obviously then there’s more pressure on you.”

According to the ONS, the UK’s inflation rate was also 3.8% in July and August, which is still well above the Bank of England’s 2% target.

However, central bank economists had predicted inflation would rise to 4% in September.

Mr Fitzner said: “The biggest drivers of increase came from oil prices and airfares, where the decline in prices compared to last year has eased.”

He added: “These were offset by lower prices on a range of entertainment and cultural purchases, including live events.”

Mr Fitzner told BBC Radio 4’s Today program that food prices were still “at a fairly high level of 4.5%” but added that “it is encouraging that we are seeing the steady increase coming down a bit”.

“These are just one month’s numbers, so we’ll have to see what happens in the coming months, but there’s still a small glimmer of hope there,” he said.

Paul Dales, chief UK economist at Capital Economics, said food price inflation could rise further but “this will probably be the peak of inflation”.

James Walton, chief economist at the Grocery Distribution Institute, said the rate of decline in food and beverage inflation “is consistent with our predictions that food inflation will begin to slow, and we may have peaked.”

“While this is good news, prices for shoppers continue to rise more slowly each year,” he said.

Mr Walton noted that products such as red meat, coffee and chocolate were still seeing strong price increases, which he attributed to production-related problems such as bad weather.

The Chancellor said: “I’m not happy with these figures. For too long our economy has been stuck, people feeling like they’re investing more and coming out less.”

Reeves added that he is committed to ensuring the government supports “people struggling with high bills and cost of living challenges, delivering economic growth and building an economy that works for and rewards working people.”

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Stride claimed national insurance increases, government borrowing and not having the “backbone to reduce spending” were contributing to inflation.

The general inflation figure for September is more important than most other months.

This is because the government often uses this as a reference for increasing benefits in April.

This means millions of people dependent on benefits will likely see a 3.8% increase in their payments next year.

The state pension will increase even more, because the annual increase for it is determined as follows: so-called triple lock.

This ensures that the state pension increases each year in line with inflation, wage increases or 2.5%, whichever is higher. The inflation figure of 3.8% in September remains below the average earnings in the relevant period (4.8%), which means that wage increases will be the determining factor in the pension increase.

According to the ONS, inflation figures over the past three months have been the highest recorded since January 2024, when the rate was 4%.

Inflation in the UK remains well below the 11.1% figure reached in October 2022, the highest rate in the last 40 years.