Households to face higher prices for food even after war in Iran eases

UK households will still pay elevated prices for food staples like bread and pasta even after the Middle East conflict de-escalates, according to new analysis by the Energy and Climate Intelligence Unit (ECIU). The report highlights that food prices surged due to the conflict and extreme El Niño weather, which disrupted global supply chains for cocoa, food oils, rice, sugar, and other commodities. Historical data shows price increases rarely fully reverse, with shelf prices dropping just 1% after six months and only 7% after two years, leaving affordability shocks largely unresolved. The ECIU found that UK food prices could be 50% higher by November than mid-2021 levels, exacerbating the cost-of-living crisis. Recent targeted cuts to food tariffs by Chancellor Rachel Reeves may lower costs for items like biscuits, chocolate, and dried fruit, but broader systemic issues persist. Chris Jaccarini, ECIU’s food and farming analyst, noted that war and extreme weather are driving up oil, gas, and fertilizer costs, which directly impact food production and transportation. England has experienced three of the worst harvests in five years, with 2024 expected to be the hottest globally, increasing risks of floods and droughts. Jaccarini emphasized that reducing reliance on fossil fuels and achieving net zero could stabilize food prices by shielding them from volatile global markets. Henry Dimbleby, former lead of the National Food Strategy, warned that food inflation will remain high unless supply chains diversify and resilience improves, as climate change and energy volatility worsen. The report underscores that without structural changes, higher food prices will become permanent, disproportionately affecting low-income households. The ECIU’s findings suggest that prevention—such as cutting fossil fuel dependence—is the only sustainable solution to mitigate long-term price increases.