UK food price inflation accelerated sharply in June 2025, as soaring temperatures and extreme weather conditions hit fruit and vegetable harvests, pushing up prices at supermarket tills. The latest figures show the direct impact of climate volatility on household grocery bills and add to the cost pressures facing both consumers and retailers.
Hot Weather Fuels Food Price Hikes
Data from the latest British Retail Consortium (BRC)-NIQ Shop Price Index reveals a significant jump in food inflation, reversing a recent trend of deflation in overall shop prices.
- Food Inflation Accelerates: Annual food price inflation surged to 3.7% in June, a sharp increase from 2.8% in May and the fastest rise in over a year.
- Fresh Produce Hit Hard: Fresh food prices were a key driver, rising 3.2% year-on-year. Retailers have directly linked this to hot, dry weather reducing crop yields.
- Specific Price Rises: Wholesale prices for some seasonal fruits saw dramatic annual increases, with reports of gooseberries up 243%, blackberries up 25%, and raspberries up 15%.
- Overall Shop Prices Return to Inflation: The rise in food costs was enough to push overall shop price inflation back into positive territory at 0.4%, the first time in nearly a year, as reported by ITV News.
The Impact of Climate on UK Farming
The recent price hikes underscore the growing vulnerability of the UK’s food supply chain to extreme weather. Farming leaders have been vocal about the challenges.
- Harvests ‘On a Knife Edge’: The hot, dry spring and summer conditions have put harvests on a “knife edge,” according to analysis from the Energy and Climate Intelligence Unit (ECIU).
- Farmer Warnings: The National Farmers’ Union (NFU) has warned that heatwaves and drought put immense pressure on crops and livestock, threatening the availability of homegrown fruit and vegetables.
- Other Cost Pressures: Beyond weather, retailers also point to rising operational costs from increased employer National Insurance contributions and the National Living Wage as factors contributing to price pressures.
Financing Resilience in the Food and Agriculture Sector
The increasing volatility in weather and costs highlights the need for businesses across the food supply chain—from farms to retailers—to invest in resilience, efficiency, and adaptation. Information on government support and finance options can be a useful starting point. Working with a specialist finance broker provides access to a wide network of lenders and tailored solutions. With connections to over 95 lenders, brokers can help you navigate the market effectively.
Key finance solutions for the food and agriculture sector include:
- Asset Finance: For investing in new farm machinery, irrigation systems, or energy-efficient retail refrigeration to mitigate the impact of extreme weather and rising energy costs.
- Working Capital Loans: To manage cash flow during periods of volatile wholesale prices or to invest in securing supply contracts.
- Green and Sustainability Loans: Funding for projects that improve environmental sustainability, such as water storage infrastructure or adopting more resilient farming practices.
- Business Loans (Unsecured and Secured): For diversifying operations, investing in new technology like vertical farming, or upgrading facilities.
Partnering with a finance broker simplifies finding and applying for the right funding. They understand the unique challenges of the agriculture and retail sectors and can guide businesses to the most suitable financial products. For further impartial advice, explore resources from the British Business Bank and guides like the ICAEW Business Finance Guide.
Conclusion
The June surge in food inflation, directly linked to hot weather impacting UK harvests, is a clear sign that climate change is having a tangible effect on household costs. It highlights the urgent need for investment in a more resilient food supply chain. For businesses in the sector, navigating this new reality will require strategic planning and access to the right financial tools to adapt to an increasingly unpredictable environment.
Is your business in the food, agriculture, or retail sector facing challenges from climate volatility and rising costs? Explore tailored finance solutions today and connect with our network of over 95 lenders to find the perfect fit for your needs.