Britons could continue to suffer the “pain” of higher food prices due to the Iran war for another 18 months despite Donald Trump’s peace deal, The i Paper has been told.
Shopping bills could carry on rising until the end of 2027 because of all the extra costs faced by farmers and food manufacturers, economists have said.
Petrol and diesel prices may not come down substantially at the forecourt until 2027, the experts also warned British motorists. UK holidaymakers’ flight prices could be affected for many more months too.
Oil prices eased below $80 a barrel after the US and Iran signed a “memorandum of understanding” to end the war and reopen the Strait of Hormuz shipping route.
Despite the huge sense of relief, uncertainty remains because Washington and Tehran still have to negotiate a final deal in a “maximum” of 60 days.
‘Lot of pain’ ahead for food bills
UK farmers and growers have had to deal with a huge rise in fertiliser, red diesel and other energy costs since the conflict, launched in February, rocked global shipping.
It means it could continue to cost more to produce in the year ahead, with supermarket prices expected to get sharper from the autumn, experts told The i Paper.
“There is still a lot of pain to come in terms of the second-order impacts on food prices and the supply chain,” said Ashley Kelty, energy analyst at investment bank Panmure Liberum.
“I think the impact on food prices could continue for 18 months, until the end of next year,” he added.
Fresh produce price hikes expected this year (Photo: Getty)Marco Forgione, head of the Charted Institute of Export and International Trade, said higher insurance and shipping costs are likely to remain in place for the food supply chain for the foreseeable future.
The impact on fertiliser, red diesel and chemical prices for farmers preparing for next year’s planting and harvest may not become clear for several months, he added.
“Food prices lag because of planting and harvest cycles, so we are likely to see elevated food prices well into 2027,” said Forgione.
“It’s hard to say at this stage, but it could possibly go on into late 2027,” he added. “I do think food prices could well be higher next year than they are this year.”
Why annual shopping bills could go up £470
Phil Pluck, the Cold Chain Federation’s chief executive, thinks the Food and Drink Federation’s prediction of food inflation hitting at least 9 per cent by the end of 2026 is still relevant.
“There are so many extra costs that only begin to hit home in terms of rising food prices to the consumer from the autumn,” said Pluck. “Those will continue to be felt through the winter, into 2027.”
“I would hope we start to see some stabilisation in food prices next year. But it’s too early to say – any uncertainty in energy supply could mean further price rises. Food prices coming down next year is too much to hope for I’m afraid.”
Meats, chicken, baked goods, fruit and veg could all get more expensive in the months ahead, food bodies previously told The i Paper. Pub owners also warned that £9 pints could become normal in London and £7 elsewhere in the country.
A 9 per cent increase would add £470 to average annual shopping bills, according to NimbleFins insurance firm’s analysis of Office for National Statistics (ONS) data.
‘Elevated’ petrol prices until next year
Both petrol and diesel prices may start to come down for UK motorists at the forecourt within weeks – but they may not return to pre-conflict levels until the end of 2026.
The RAC said it expects the price of petrol to fall from its current average of 156p per litre to 148p within the next fortnight, and diesel to similarly fall from 177p to below 160p.
Petrol and diesel prices have soared due to the Iran war over the past four months (Photo: Finnbarr Webster/Getty)However, Ashley Kelty, energy analyst at investment bank Panmure Liberum, warned of volatility in both oil supply and prices to continue for at least three to six months – even if Trump’s deal holds.
There will be problems getting the Middle East’s oil production capacity back to normal for several months. There will also be fierce competition among countries to rebuild their oil stockpiles, he said.
“Petrol and diesel prices should start to come down within a few months – but perhaps not by as much as people expect,” said Kelty. “The volatility could continue into next year.”
Adam Bell, a partner at energy consultancy Stonehaven, said the global “rush to rebuild” oil stockpiles will keep prices higher than before the conflict for the rest of this year.
“This means we should assume petrol and diesel prices remain elevated into Christmas,” said the former UK Government advisor.
“This will impact food costs – meaning that people will still be feeling the effect of Trump’s war as they buy their turkeys for Christmas.”
The recent rise in air travel costs may not begin to stabilise until 2027, experts also warned. “There will continue to be pressure on jet fuel in the US and Asia, so there could be an impact on flights and air fares that could continue for several months,” said Kelty.
Higher energy bills until summer 2027
Ellen Fraser, an energy expert at the consultancy Baringa, said volatile gas prices, though not strictly related to the Iran conflict, made it hard to see Britons’ energy bills coming down before summer 2027.
“You would hope household energy bills can remain at least steady. But gas prices are likely to be elevated and volatile until next summer, so they’re unlikely to come down materially until then.”
Under the current April to June energy price cap, the average annual bill for typical gas and electricity bill is £1,641. It will jump up 13 per cent to £1,862 from July.
Energy experts at Cornwall Insight forecasts that it will increase by a further 2 per cent to £1,899 for the October to December period – but next year remains uncertain.
Dr Craig Lowrey of Cornwall Insight said the final details of any concentre Iran peace deal “will matter enormously” in trying to price energy costs in the months ahead.
“We would certainly expect gas prices to remain high until after the winter, as the gas storage picture indicates we will be going into winter with historically low levels.”
The Bank of England held interest rates at 3.75 per cent, below the 4 per cent high predicted by economists at the outset of the Iran war.
But economists still expect inflation to rise in the months ahead. The recent surprise dip in UK inflation for April was only a “fleeting reprieve”, said Katie Horne, banks relationship manager at financial firm Flagstone.
The Government has been approached for comment.
Hence then, the article about cost of food cars and holidays will keep rising until 2027 was published today ( ) and is available on inews ( Middle East ) The editorial team at PressBee has edited and verified it, and it may have been modified, fully republished, or quoted. You can read and follow the updates of this news or article from its original source.
Read More Details
Finally We wish PressBee provided you with enough information of ( Cost of food, cars and holidays will keep rising until 2027 )
Also on site :