UK food inflation rose to 2.8% year-on-year in May, marking its highest level since May 2024, mainly driven by surging beef prices and rising costs in fresh produce. Data from the British Retail Consortium indicates that tight beef supply and elevated demand are straining the food sector, with limited ability for businesses to absorb or pass on increased costs.
Beef prices have climbed roughly 20% over the past year, with the most significant acceleration occurring in the last six months. Farming and retail groups cite falling cattle numbers and insufficient production incentives as major factors behind the squeeze. Environmental policy shifts and limited government support for meat producers have contributed to the shortfall, with a reported 5% drop in cattle numbers and a slight uptick in consumer demand amplifying the inflationary pressure.
The Agriculture and Horticulture Development Board noted that cattle prices have reached record highs since early 2025, with some of this increase now being reflected in retail prices. Restaurant operators and meat processors say cost increases across labour, energy, and compliance are compounding the situation.