Food prices rise at slowest pace in 17 months as inflation holds steady

Inflation remained at 2.8% in May, defying predictions it would climb to 3%, as the pace of food price rises slowed to a 17-month low.

The Office for National Statistics reported that while transport costs and petrol prices pushed upward, price increases for meat, dairy and vegetables eased significantly. Food inflation dropped from 3% in April to 2.2% in May — the slowest rate since December 2024.

Beef and veal price rises slowed from 13.2% in April to 9.4% in May, while the British Retail Consortium said the figures showed UK supermarkets remain highly competitive.

Analysts had expected inflation to rise steadily due to conflict in the Middle East, but a recent US-Iran peace deal means further increases could be smaller than feared. The Bank of England, which targets 2% inflation, is expected to hold interest rates steady at 3.75% when it meets on Thursday.

Chancellor Rachel Reeves said the government was protecting families with cuts in energy bills and freezes in fuel duty and rail fares.