The Middle East crisis is expected to increase the average family’s grocery expenses by over £150 annually, according to experts. The Institute of Grocery Distribution has revised its food inflation forecast from 3.6% to more than 8% by June this year.
This anticipated surge in prices is concerning for many households, as the cost of the weekly shopping already represents a significant portion of their budget. Adding to the pressure, food prices in stores have surged by approximately 38% since before the Covid pandemic, as reported by the IGD.
Referred to as “Trumpflation” by critics, the latest warning from the IGD attributes the impact to the conflict involving US President Donald Trump and Israel’s actions towards Iran. The rise in oil prices and Iran’s disruption of the Strait of Hormuz are likely to lead to increased food costs and higher expenses for consumers.
James Walton, the chief economist at the IGD, highlighted that the Middle East conflict could prolong the cost of living crisis. In a best-case scenario, food inflation may surpass 8% by June 2026, adding over £150 to the average household’s grocery bill annually.
Walton also addressed concerns over excessive profits in the food industry, emphasizing that thin profit margins persist despite higher prices. The analysis shows that margins for basic food items remain low, with some items like chicken breast sold at cost, and beef mince generating less than a 1% margin.
Food inflation hit a peak of over 19% in March 2023 due to Russia’s invasion of Ukraine, but has since dropped to 3.6% in January this year, according to the Office for National Statistics. The ongoing Iran war is expected to drive inflation higher in the coming months, with the Bank of England forecasting a potential increase to 3.5%.
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