Families hit by £605 food bill as extreme weather and energy crisis bites

The average UK food bill has gone up by around £605 over the last two years, as climate and energy costs continue to hit shoppers in their pocket, according to new research [1] for the Energy and Climate Intelligence Unit (ECIU).

The report Climate, Fossil Fuels and UK Food Prices: 2023 [1], was carried out by researchers from the universities of Bournemouth, Exeter and Sheffield who have recently advised the Government on the domestic and international drivers of food inflation in the UK. They looked at fossil fuel price rises and the rise in global temperatures relative to a 1950-80 baseline, to calculate the impact on food prices.

Professor Wyn Morgan, one of the report authors said, “It is clear from the evidence that climate change is an increasingly prominent feature amongst the drivers of food price inflation. In 2022, energy costs dominated the headlines and these fed through to a high headline rate of inflation for food. And yet, as energy costs have fallen back, climate change has emerged as a bigger driver of inflation for food over the last two years.

“Assuming average food price inflation of 15% for 2023, our results would suggest that climate change alone will account for a third of price increases this year. Given we expect climate impacts to get worse, it is likely that climate change will continue to fuel a cost of living crisis for the foreseeable future. With an El Niño event now confirmed, 2024 may have even worse in store for hard pressed shoppers.”

Climate costs have increased since last year, rising from £169 in 2022 to £192 in 2023, more than offsetting the effects of falling energy prices this year. These increased climate impacts mean that climate change has now added more than energy to food bills since the beginning of 2022, with £361 of price increases attributable to climate change, and £244 to oil and gas costs. This gives rise to the very real concern that, even as energy prices come down in the years ahead, increasing climate impacts are likely to keep food prices high, a risk highlighted by the Bank of England Governor Andrew Bailey in a recent speech to the National Farmers Union [2].

Commenting on the report,COP26 President Sir Alok Sharma said: “The negative impacts of a changing world climate are here and now and are putting real upwards pressure on the cost of living.

“From staples like wheat and rice, to fruits like bananas and oranges, our food supplies are global and it is therefore imperative that the UK continues to show leadership in its efforts to tackle the climate crisis, so that we bring other nations with us and help cut the risks to our food security.”

Heatwaves across the Mediterranean, India and South America in 2023 have all had a major impact on food production and global food prices this year, with food price inflation hitting nearly 20% in April and May. Store cupboard items like sugar, rice and tomatoes have all been hit by extreme weather, with olive oil increasing in price by 50% following two years of drought and heatwaves in Spain and other key exporters in southern Europe. Previous ECIU analysis revealed the vulnerability of UK food imports to heatwaves and other extreme weather in the Mediterranean, a region that provides a quarter of British food imports [3].

Tom Lancaster, land analyst at ECIU said, “Climate change is playing havoc with global food production, and this is inevitably feeding through to higher prices at the tills. Across 2022 and 2023, climate change alone added the equivalent of six weekly shops to the average household food bill.

“Added to that the dependence of our current farming system on volatile oil, gas and fertiliser prices, and the last two years has seen a perfect storm of extreme weather, high gas prices and global instability leading to unprecedented food price inflation.

“The good news is that steps to make farming more sustainable can not only cut emissions but also make our food production more resilient to the extremes of flooding and drought. Government plans in England to support greener farming with more hedgerows, improved soil health and tree planting schemes are therefore vital to our future food security.”

In the UK, drought in 2022 hit key staples such as potatoes and onions, and has been followed by an unusually wet harvest in 2023, and then the hottest September on record. More recently, Storm Babet has left hundreds of acres of prime farmland under water, delivering the third wettest three day period for England and Wales since records began in 1891 and hitting supplies of potatoes and other vegetables.

The UK government prediction in December 2021 that climate change posed the biggest threat to domestic food production [4] has been vindicated, with British farmers contending with increasingly extreme weather and volatile input prices [5]. Defra plans to introduce more support for sustainable farming through their new environmental land management schemes [6] could help reduce exposure to these climate impacts, by increasing support for natural measures that can build soil fertility, such as green manures and cover crops. These measures can also help build resilience to drought, by increasing the capacity of soil to retain moisture.