Food prices won’t come back down – new analysis suggests shocks drive up food prices indefinitely

New analysis from the Energy and Climate Intelligence Unit (ECIU) [1] has found that when food prices rise during major shocks, they tend to come down only slowly and partially afterwards, leaving households facing a higher grocery bill long after the original crisis has eased.

On average shelf-prices fall just 1% of the original rise after six months, 5% after a year and 7% after two years. In wage-adjusted terms, only around a third (35%) of the affordability shock had unwound after two years.

The report, based on more than thirty years of UK data, argues that this “rocket and feathers” effect - where food prices shoot up like rockets but drift down like feathers - helps explain why food prices remain far above pre-pandemic levels even after some of the shocks that drove them have eased.

Chris Jaccarini, food and farming analyst at the Energy and Climate Intelligence Unit (ECIU), said: “Shoppers feeling that prices are on a never-ending escalator upwards is borne out by the data. War and extreme weather are increasingly pushing up the cost of the weekly shop with the latest conflict in the Middle East driving up the price of oil, gas and fertiliser used to grow, ship and process food.

"In England, we’ve had three of worst harvests on record in the past five years and next year is shaping up to be the hottest globally. The only way to stop the growing risk of floods and droughts is to reach net zero and bring the climate back into balance. That means cutting our reliance on oil and gas, which would also help shield food prices from the volatile global markets that have helped drive the cost-of-living crisis. As the data shows, once prices are up, they’re up - prevention is the only cure”

The research finds that in the early phase of a shock, commodity prices often rise before retail prices fully respond, narrowing the gap between the two. As retail prices catch up and then exceed the increase in upstream costs, that gap widens again. When commodity and energy costs later ease, retail prices tend to remain elevated, leaving a larger spread than before the shock. These findings indicate that as supply shocks feed through the food system, they push prices up, but as their impacts on supply chains dissipate, this does little to bring prices down.

Henry Dimbleby, former lead of the government’s National Food Strategy, said: “Food inflation has been brutal - and it will keep biting unless we tackle the underlying causes. That’s because our food system is tightly tied to energy, fertiliser and transport costs - and we’ve built too little resilience into supply chains and production. 

"As climate change and energy volatility worsen, shocks are likely to become more frequent and more severe. Unless we cut our reliance on fossil fuels, diversify supply chains and build real resilience into food production, higher food prices will become a lasting feature of daily life - with the heaviest burden falling on those least able to bear it.”

Staples including pasta (+50%), frozen vegetables (+55%), chocolate (+58%), eggs (+59%), beef (+64%) and olive oil (+113%) have already seen some of the steepest rises [11]. Further sharp rises are expected as the impact of the conflict in the middle east pushes up costs across supply chains. Analysis of industry forecasts found UK food prices are on track to be 50% higher by November 2026 compared to levels at the start of the cost-of-living crisis in mid-2021 [8]. This would suggest that the amount of price growth seen in the nearly 20 years prior to the crisis would be achieved in just over 5 years – almost quadrupling the pace of food inflation.

But it’s not just war in the middle east that’s expected to push prices higher. Scientists are warning of a ‘super’ El Niño [10]. Historically, El Niño has always impacted agriculture, but its combination in more recent times with climate change is proving to be devastating, as both raise global temperatures. Together, they’re pushing the limits of what crops and livestock can tolerate.

Some commodities are especially exposed. El Niño tends to put upward pressure on cocoa, food oils, rice and sugar, [9] with wider risks for other products linked to the tropics like bananas, tea, coffee, chocolate and soy-fed meat.

The warnings are bad news for households who have already seen food prices rise more than 40% since mid-2021, outpacing wages which have grown less than 30% on average. Though eating more vegetables, beans and pulses can be cheaper [2], for families with children in the lowest fifth of earners a healthy diet now requires spending around 70% of disposable income after housing costs, placing basic nutritional security increasingly out of reach [3].

Anna Taylor, Executive Director of the Food Foundation, said: “What’s striking here is the lasting impact of these shocks: once food prices go up, they rarely come properly back down and that means for millions of people in Britain food becomes harder and harder to afford, and food insecurity continues to remain unacceptably high even after the headlines have moved on.. If we are serious about making food more affordable, we have to focus on reducing the impact of the next shock, not just responding after the damage is done.”

“The UK needs to stop lurching from crisis to crisis and put a long-term plan for food resilience on a statutory footing. A Good Food Bill would help protect families, farmers and food businesses alike by building a more resilient food system and helping to ensure that everyone can afford and access healthy food, even as climate impacts and geopolitical disruption become more frequent.”

It’s not just policymakers in Westminster that are concerned but those on Threadneedle street too. The Bank of England [5] has repeatedly warned that food prices and inflation are highly susceptible to extreme weather made more likely by climate change. The European Central Bank has estimated that climate impacts on food could lead to structural increase in inflation in coming years [6].

Senior officials at the bank have also flagged that these are the kind of inflationary shocks central banks are least equipped to handle with interest rates alone, because they stem from supply disruptions [7]. Raising rates to curb inflation risks slowing investment and growth and potentially makes the Bank’s job harder by discouraging companies and governments from investing in net zero and so containing climate risk. This is a vicious cycle where the consequences of climate change undermine action on climate change.

David Barmes Senior Policy Fellow at LSE’s Centre for Economic Transition Expertise, said: “This report highlights a growing macroeconomic problem: the shocks increasingly driving inflation are supply-side shocks, often linked to climate impacts and geopolitical disruption, and those are exactly the shocks that interest rates alone are least well suited to solve.

“When harvest failures, energy price spikes, or supply-chain disruption push inflation up and output down at the same time, policymakers face much harder trade-offs. That is why climate resilience and the net zero transition should be seen as part of the inflation fight too: reducing exposure to fossil fuel volatility and climate damage is not separate from price stability, but increasingly central to it.”
 

ENDS

Notes to editors:

1. The ECIU Report: Rockets & Feathers is available to download here: https://eciu.net/analysis/reports/rockets-and-feathers 

2. You don’t have to go vegan to save the planet – these food swaps will help https://inews.co.uk/opinion/vegan-save-planet-food-swaps-help-4348027

3. Food Foundation, The Broken Plate (2025):  https://foodfoundation.org.uk/sites/default/files/2025-01/TFF_The%20Broken%20Plate%202005%20FINAL%20DIGITAL.pdf

4. FDF revises food inflation forecast to at least 9% by the end of 2026: https://www.fdf.org.uk/fdf/news-media/press-releases/2026/fdf-revises-food-inflation-forecast-to-at-least-9-by-the-end-of-2026/#:~:text=FDF%20previously%20forecast%20that%20the,contracts%20come%20up%20for%20renewal

5. Weathering the storm: stability in a changing climate - speech by Sarah Breeden: https://www.bankofengland.co.uk/speech/2025/july/sarah-breeden-speech-at-the-annual-chapman-barrigan-lecture-series

6. ECB Research from the European Central Bank (2025) has shown that without adaptation, global food price inflation could increase by 1 to 3 percentage points by 2035, adding between 0.3 and 1.2 percentage points to headline inflation. Kotz, Maximilian and Kuik, Friderike and Lis, Eliza and Nickel, Christiane, The Impact of Global Warming on Inflation: Averages, Seasonality and Extremes (May, 2023). Available at SSRN: https://ssrn.com/abstract=4457821 or http://dx.doi.org/10.2139/ssrn.4457821

7. Measure, Model, Tackle, Tailor: The Bank of England’s approach to assessing and managing climate impacts across its core objectives - speech by James Talbot: https://www.bankofengland.co.uk/speech/2026/february/james-talbot-speech-at-the-london-school-of-economics

8. ECIU, Food prices set to rise by 50% since start of cost-of-living crisis, new analysis shows: https://eciu.net/media/press-releases/food-prices-set-to-rise-by-50-since-start-of-cost-of-living-crisis-new-analysis-shows 

9. ECIU, El Niño, climate change, and UK food supply (2024) https://eciu.net/analysis/reports/2024/el-ni%C3%B1o-climate-change-and-uk-food-supply

10. Met Office, Pacific Ocean warming signals the possible return of a strong El Niño (2026): https://www.metoffice.gov.uk/blog/2026/met-office-what-is-el-nino-and-will-we-see-one-this-year

11. This is equivalent to the following £ increases:

Price

                                         The eve of the cost-of-living crisis         Mar-26         Increase

500ml virgin olive oil                           £2.59                                     £5.51            +£2.92

550g beef mince (15% fat)                £2.89                                     £4.75            +£1.86

6 eggs (large, free range)                  £1.32                                      £2.09            +£0.77

Cadbury Dairy Milk chocolate bar, 110g £1.17                                £1.84             +£0.67

1kg frozen garden peas                      £1.09                                     £1.70              +£0.61

500g penne pasta (Napolina)            £1.00                                    £1.50              +£0.50

 
All prices are modelled estimates for illustrative purposes only. To calculate March 2026 prices, we use observable trends in official ONS price indices, together with Tesco list prices for the end of April. Tesco is used as the largest UK food retailer by market share. All prices are for own brand products unless otherwise indicated.

For more information or for interview requests:

George Smeeton, Head of Communications, ECIU, t: 020 8156 5305, m: 07894 571 153, email: george.smeeton@eciu.net