Food inflation in the UK could more than double by summer if disruption caused by the Iran war persists, according to new forecasts. 

The price of food could rise to over 8% by June if the conflict in the Middle East continues to disrupt global energy markets, according to the Institute of Grocery Distribution (IGD).

The IGD warned that in a worst-case scenario, the spike in prices would be short but sharp, pushing average annual food inflation to around 6.4% across 2026 and adding more than £150 to the average household’s grocery bill. A middle scenario projects inflation of around 4.8%. A scenario with no further conflict escalation poses an increase of 3.8%.

The new forecast comes as UK food prices sit at around 38% higher than pre-Covid levels. 

Concern centres on energy costs, with oil and gas critical at every stage of the food supply chain, and any disruption in energy production feeding directly into food prices.

IGD chief economist James Walton said retailers’ tight margins gave them “limited capacity” to absorb global shocks and over time the situation would increase the risk of “weaker availability and greater price volatility”.

Walton 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. If the energy shock is more severe, food inflation could reach over 8% by June 2026 versus 3.6% now, which would add over £150 to the average household grocery bill per year. 

“Persistently high food prices continue to fuel concern over excess profits, based on the assumption that higher prices must mean higher profits for food businesses. Our analysis shows that the evidence points in the opposite direction: margins for basic food and drink remain exceptionally thin, and in many cases have fallen in recent years. For example, margins on nine everyday food items average just 1.5% across the supply chain, with items such as chicken breast sold at cost and beef mince generating under 1% margin.

“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 volatility to the system.”

Karen Betts, chief executive of the Food and Drink Federation, added: “While food inflation fell slightly in February 2026, I am concerned that this is the calm before the storm. The longer the conflict in the Middle East goes on, the bigger its impact will be on food prices. With food and drink price inflation already running above historical averages, heightened energy, maritime fuel and fertiliser costs will put further pressure on prices.

“Food and drink is an essential, bought by every household, every week. While it can take several months for cost rises to filter fully through to shop shelves, the cost of the Iran conflict will be felt by shoppers this year. If government is serious about tackling the rising cost of living, it must provide our industry with at least the same support as other manufacturing sectors. The current energy shock is yet another structural shock our industry will have to absorb, on top of the Ukraine war, the costs of realigning food law with the EU once again, and new regulatory burdens.”

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