Revealed: Food inflation driven by climate impacted foods – not wages or regulation

Inflation for these five foods - butter, beef, milk, coffee and chocolate - peaked at 16.0% in July 2025, over six times higher than the 2.6% average inflation rate for all other food and drink. Food inflation is a key contributor to the UK’s headline inflation rate, with the Bank of England warning that extreme weather is increasingly influencing prices [2].
 
The findings come as households are braced for the impact of the Iran war on food prices, with food prices on track to be 50% higher by November 2026 compared to levels at the start of the cost-of-living crisis in mid-2021 [3]. Food inflation ticked down in April, with the war’s impact yet to feed through to consumer prices.
 
Chris Jaccarini, land, food and farming analyst at the Energy and Climate Intelligence Unit (ECIU) said:

“While today’s inflation figures suggest that conflict in the middle east has not yet fed through to food prices, pressure is building in supply chains. Food prices are on track to be 50% higher than when the cost‑of‑living crisis began in mid‑2021, while energy, insurance and water have already reached that milestone [3].  
 
“While wage bills and regulation play a role, they don’t explain why coffee, chocolate or milk prices have surged.  Climate shocks do – and until we stabilise the climate, households will keep paying the price. We have now seen three of the five worst harvests on record this decade due to extreme weather [4], and scientists are predicting 2027 to be the hottest year on record with climate change combining with the El Nino effect kicking off this year.
 
“Unless we break the link with fossil fuels and bring emissions to net zero, these pressures will intensify. Only net zero can bring the climate back into balance and protect us from whims of Putin and Trump."

It is not just British-grown foods that are at risk. The UK imports around 40% [5] of its food from overseas, including many staples like rice, bananas and tea, which we cannot simply grow at home.

In 2022–23, climate impacts added an estimated £360 to the average UK household food bill [6]. Government forecasts suggest household climate exposure will deepen, with over half of UK fruit and legume imports coming from climate-vulnerable countries by 2050.

Central banks are clear that climate change increases food prices in ways they cannot control or predict, creating systemic risk to our food system [2].