Chancellor Rachel Reeves met supermarket bosses this week to address rising cost pressures as industry forecasts warned UK food inflation could reach at least 9 per cent by the end of 2026.

Retail leaders from major chains including Tesco, Sainsbury’s and Aldi attended the meeting at No 11 Downing Street, where ministers sought to assess the potential impact on prices and supply chains. A government spokesperson said it was “a positive meeting” and that both sides agreed to explore further steps to ease the cost of living for consumers.

The Food and Drink Federation has sharply revised its outlook, increasing its forecast from 3.2 per cent to between 9 and 10 per cent following disruption to global energy markets linked to the Iran conflict. The trade body said the projection assumes the Strait of Hormuz reopens within weeks and key oil, gas and fertiliser infrastructure returns to normal within a year.

Dr Liliana Danila, chief economist at the federation, said “the food and drink sector is already feeling the force of this geopolitical shock”, citing rising energy, transport and packaging costs alongside supply chain disruption. She added that despite attempts to limit price increases, “it’s clear that food inflation is going to rise in the months ahead”.

According to the federation, manufacturers are facing immediate cost increases due to higher oil and gas prices, with smaller producers particularly exposed as they rely on spot energy purchases. Larger companies are also bracing for rising costs as fixed-price energy contracts come up for renewal.

The British Tomato Growers’ Association warned in comments reported by The Guardian that escalating energy costs could force producers out of business and disrupt supply. Its chair Simon Conway told the newspaper that “no one can absorb these kind of cost shocks”, adding that the burden would need to be shared across the supply chain.

Helen Dickinson, chief executive of the British Retail Consortium, said the meeting with ministers was “constructive” and that while some inflation is inevitable, there are policy levers available to limit the impact on households.

The federation also highlighted mounting pressure across agriculture, with sharp increases in red diesel costs and tightening fertiliser supplies adding to the strain on farmers and raising the risk of further price increases.

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