UK inflation rose to 3.4% in the year to December, slightly higher than expected.
According to the Office for National Statistics (ONS), rising prices were partly driven by the increased cost of airfare and tobacco.
Inflation was 3.2% in the year to November.
Related Story
Food and non-alcoholic drink inflation rose to 4.5% in the 12 months to December. This is up from 4.2% in the 12 months to November.
On a monthly basis, food and non-alcoholic beverages prices rose by 0.8% in December, compared with a rise of 0.5% a year ago.
Balwinder Dhoot, director of Growth and Sustainability at the Food and Drink Federation (FDF), said: “After a challenging year for food and drink manufacturers, food inflation saw a further increase in December 2025.
“As costs rise across the board it’s clear that households are feeling the squeeze, resulting in a subdued Christmas for the sector. The low UK consumer confidence, coupled with the prospect of continued geopolitical volatility, is concerning for food and drink manufacturers who face rising costs and tighter budgets themselves.”
According to the FDF, in November, 61% of adults in Britain reported an increase in their cost of living compared with the previous month. Of those who reported an increase in the cost of living, 95% reported their food shopping had increased in price and 39% are cutting back spending on essentials as a result.
Dhoot added: “Tackling rising prices and food security is a priority for industry and government alike, and these challenges underscore the need for government to better incentivise investment and productivity growth in our sector.
“This will help protect the sector from future shocks and help manufacturers minimise price rises for consumers.”
Click here to sign up to Retail Gazette‘s free daily email newsletter
