Inflation latest: New data suggests soaring food and drink prices may have peaked

Food and drink manufacturers’ costs have fallen for the first time in more than seven years, a report today suggests, offering some crumbs of comfort over the future direction for inflation.

Releasing its latest UK Sector Tracker, Lloyds Bank said the food and drink sector posted an input cost reading of 49.4 for May – the first month it has registered below the 50 level that separates growth from contraction since April 2016. This was supported by a drop in commodity prices.

In total, four of the 14 sectors monitored by the tracker saw their input costs decrease last month, the highest number since June 2020, indicating some broadening in the easing of cost pressures across the UK economy. Seven other sectors also saw input costs continue to rise, but at a slower pace than the month before, bringing the total number of sectors with either decreasing costs or slowing cost rises to 11 – one more than April.