UK food price inflation falls to lowest since March 2025

Key Facts

In a development reflecting easing inflationary pressure on British households, UK food price inflation fell to its lowest level since March 2025, according to the British Retail Consortium (BRC). The decline was attributed to lower seasonal prices for items such as strawberries and ice cream, providing some relief for consumers.

The drop came amid broader weakness in retail sales, as the CBI Distributive Trades index printed at -54 in June, missing the forecast of -41. This highlights ongoing challenges in the retail sector despite the moderation in food costs.

Market attention now turns to upcoming UK inflation data, as a sustained slowdown in food prices could give the Bank of England more flexibility to ease monetary policy. With the unemployment rate steady at 4.4% and core CPI pressure easing, any downside surprise could reinforce expectations for rate cuts in the coming meetings.