UK headline inflation steady at 3.8% as food prices rise to 5.1%

The United Kingdom’s headline inflation rate held steady at 3.8 percent in August, the Office for National Statistics said, but food and drink prices continued to surge for a fifth consecutive month, rising to 5.1 percent and leaving households feeling the squeeze. The ONS also reported that 96 percent of households said the price of their food shop had increased, the highest share in two years, highlighting widespread consumer pressure at supermarket tills.

The rise in food inflation has been driven by a mix of factors, according to industry groups and official commentary. The Food and Drink Federation raised its forecast for food and drink inflation to 5.7 percent by December, up from earlier projections, saying manufacturers are facing sustained cost pressures. The FDF noted that, between January 2020 and July 2025, prices for food and non-alcoholic drinks rose 37 percent compared with a 28 percent increase in overall prices. Sugar, whole milk and cheese have seen particularly sharp increases, the group said. Liliana Danila, the FDF’s lead economist, said that current price levels are steeper than anything seen in recent decades and that the impact of domestic policies is...