Food inflation was unchanged at 1.8% in December and remains at its lowest rate since December 2021, new data shows.

According to the latest British Retail Consortium (BRC)-NielsenIQ Shop Price Index, fresh food inflation was also unchanged last month at 1.2%, which is slightly above the three-month average rate of 1.1%.

Meanwhile, ambient inflation edged up to 2.8% in December, from 2.7% the months before, however, this was in line with the three-month average rate of 2.8% and remained at its lowest level since February 2022.

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BRC chief executive Helen Dickinson said: “With food inflation bottoming out at 1.8%, and many price pressures on the horizon, shop price deflation is likely to become a thing of the past.

“As retailers battle the £7bn of increased costs in 2025 from the Budget, including higher employer NI, National Living Wage, and new packaging levies, there is little hope of prices going anywhere but up.”

She added that modelling by the BRC and retail CFOs suggest food prices “will rise by an average of 4.2% in the latter half of the year.”

“Government can still take steps to mitigate these price pressures, and it must ensure that its proposed reforms to business rates do not result in any stores paying more in rates than they do already.”