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UK households could face food inflation exceeding 8% within months if geopolitical disruption in the Middle East persists, according to the latest analysis from the Institute of Grocery Distribution (IGD).
The IGD stated that the conflict in the Middle East could cause food inflation to more than double by the summer of 2026.
Current forecasts indicate that the rate could rise from 3.6% to over 8% by June if the industry experiences a severe, short-lived energy shock.
This projected acceleration follows a period where UK retail food prices have already risen to approximately 38% above pre-pandemic levels, exacerbated by previous energy surges related to the conflict in Ukraine.
In the highest impact scenario, annual food inflation would average 6.4% across 2026. This would increase the average household’s annual grocery expenditure by more than £150, adding pressure to budgets already affected by rising energy costs.
Additionally, food production remains highly energy-intensive, leaving the supply chain exposed to sudden fluctuations in global oil and gas prices.
According to the IGD, a more moderate energy shock scenario would still see average food inflation lift to 4.8% for the year, compared with a baseline of 3.8% without the conflict.
It also stated that although the food and drink inflation impact from the current conflict is expected to be less severe than that seen following the outbreak of war in Ukraine, many UK households are now in a weaker financial position than they were in 2022.
As a result, the welfare impact of further food price rises could be greater, particularly for lower income and vulnerable households.
It added that even if inflation eases in 2027, food prices will continue to rise, just at a slower pace than before.
Inflation outcomes in 2026 should therefore be viewed in the context of several previous years of elevated food inflation.
The report stated that even in the baseline no war scenario, food prices at the end of 2026 could easily be around 45–50% above pre-Covid levels, continuing to weigh on household budgets and shape consumer behaviour.
James Walton, chief economist at the IGD, said: “Even in the best case scenario, the conflict in the Middle East is likely to prolong the timeline for recovery from the cost-of-living crisis.
“High food prices continue to be linked to assumptions regarding profit, but our analysis shows margins for basic food and drink remain thin and have fallen in recent years. When margins are this tight, businesses have limited capacity to absorb global shocks or protect supply. Over time, that increases the risk of weaker availability and greater price volatility.”
He added: “In the short term, it is hard to see how UK food and drink businesses can respond to the global energy shock delivered by conflict in the Middle East. In the long term, the best defence against energy shocks – in fact, the best defence against many types of disruption – may be to boost UK self-sufficiency and resilience.
“The most sustainable route to moderating food inflation is not cost absorption, but improving productivity, resilience, and availability. This includes investment in domestic production, supply-chain efficiency and policy approaches that avoid adding unnecessary cost and uncertainty to a food system already operating on extremely thin margins.”
