Food inflation has climbed to its highest level in a year and a half, with rising costs for chocolate, butter and eggs pushing prices up at the tills.

The British Retail Consortium (BRC) and NIQ said food prices rose 4.2% in August, compared with 4% in July – the steepest increase since February 2024. Fresh food inflation accelerated sharply to 4.1%, up from 3.2% last month, driven largely by dairy. By contrast, prices for longer-life goods such as tins and packets slowed slightly to 4.2% year-on-year.

Overall shop price inflation rose to 0.9% in August, even as non-food products fell by 0.8%, highlighting the strain on grocery budgets.

Helen Dickinson, the BRC’s chief executive, warned the increase would hit families already struggling: “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. Retailers continue doing everything they can to limit price rises for households, but as the Bank of England acknowledged, the £7bn in new costs flowing through from last year’s budget has created an uphill battle for retailers.”

The figures come as Chancellor Rachel Reeves faces pressure from the retail sector not to impose further tax rises in her autumn budget. In a letter last week, more than 60 retail leaders – including the bosses of Tesco, Sainsbury’s and Boots – warned that higher taxes would undermine her pledges to improve living standards. Industry groups expect food and drink inflation could climb as high as 6% later this year.

Mike Watkins, head of retailer and business insight at NIQ, said the latest rise reflected a mix of factors: “Global supply costs, seasonal food inflation driven by weather conditions, the conclusion of promotional activity linked to recent sporting events, and a rise in underlying operational costs. As shoppers return from their summer holidays, many may need to reassess household budgets in response to rising household bills.”

The Bank of England has already flagged that April’s rise in employer national insurance contributions has been feeding into higher food prices, adding to the challenge for households as the cost of living crisis continues.