Food inflation hit an 18-month high in August, fuelled by price hikes across butter, chocolate and eggs.

It reached 4.2% over the month compared to 4% in July, according to the British Retail Consortium (BRC)-NIQ Shop Price Monitor, the highest rate since February 2024.

Fresh food inflation increased to 4.1% over the period, from 3.2% in July, while ambient food inflation dropped to 4.2% year-on-year, from 5.1% the month prior.

Overall shop price inflation was up 0.9% in August, despite price deflation of 0.8% across non-food items.

The increase in food prices comes after the Bank of England said the April rise in national insurance contributions added to rising food prices.

The trade association’s CEO Helen Dickinson said: “Shop price inflation hit its highest rate since March last year, fuelled by food price rises.

“This adds pressure to families already grappling with the cost of living.”

She added: “Retailers continue doing everything they can to limit price rises for households, but as the Bank of England acknowledged, the £7 billion in new costs flowing through from last year’s budget has created an uphill battle for retailers.”

Last week, the BRC reported UK consumer confidence was still in the “doldrums,” despite rising slightly in August.

Confidence in the state of the economy increased to -32 in August, up from -33 in July, according to the BRC-Opinium Consumer Sentiment Monitor.

Households were slightly more optimistic about their personal finances (-6 vs -7 last month) while retail spending increased to +4.

The Office for National Statistics (ONS) also recently reported that UK inflation accelerated unexpectedly in July, reaching its highest rate in more than 18 months.

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