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The price of foods hit by extreme weather are rising over four times faster than others in the average shop according to new analysis from the Energy & Climate Intelligence Unit (ECIU) [1].

Using the latest ONS inflation data (August 2025), the analysis finds that although these items make up just 11% of the average shopping basket, they account for nearly 40% of all food price inflation.

Prices for these five foods – butter, beef, milk, coffee and chocolate – have risen by an average of 15.6% over the past year, compared with just 2.8% for other food and drink [1].

The findings come as food inflation remains a key contributor to the UK’s headline inflation rate, with the Bank of England warning that extreme weather is increasingly influencing prices [2], making it harder for them to bring inflation back to the two percent target. The analysis also challenges recent reports that increases to the minimum wage, employer national insurance and the introduction of a packaging tax are driving inflation. These are unlikely to have had a major impact on the five foods that ECIU have found to be driving inflation.

Chris Jaccarini, food and farming analyst at the Energy and Climate Intelligence Unit (ECIU) said: “Shoppers will have noticed that the price of the weekly shop has shot up in recent years. At 73p, a pint of milk now costs 23p more than it did at start of the gas crisis [1]. Milk, butter, beef, chocolate, coffee and olive oil have all been hit by extreme weather and have all become much more expensive. Both butter and beef prices have been driven up by poor grass growth after a historically hot, dry summer, forcing farmers to rely more heavily on bought-in feed. At the same time, a virus outbreak in European dairy herds, which scientists warn is more likely due to climate change, has kept demand for British dairy high.

“While a higher minimum wage and national insurance contributions play a role in food price inflation, they don’t explain why coffee, chocolate or butter prices are surging. Climate shocks are a big factor for these products though, and until we reach net zero emissions and stabilise the climate, households will keep seeing prices rise.

“After the warmest spring and summer and the driest spring in over 100 years, England had its second worst harvest on record this year [3]. This follows last year’s poor harvest which came after incredibly heavy rainfall, made worse by climate change [4]. We have now seen three of the five worst harvests on record this decade driven by extreme weather, telling a story of escalating climate impacts that farmers are struggling to cope with.”

As highlighted in the Bank of England’s August Monetary Policy Report ‘…dry weather conditions are pushing up the production costs of beef and some dairy products in the UK and elsewhere, as cows must be fed silage earlier in the year due to less grass growth [2].’ Alongside a major outbreak of bluetongue hitting milk production in Europe, the risk of which is known to be increased by climate change, [5] this has tightened the availability of milk, and cream pushing up prices.

It is not just British-grown foods that are at risk. The UK imports around 40% [6] of its food from overseas, including many staples like rice, bananas and tea, which we cannot simply grow at home. The commodity price for cocoa, essential for chocolate, has more than tripled in the past three years and doubled in the past two years [1], after extreme heat and rainfall in West Africa hit the cocoa harvest [7]. Much of this surge has yet to fully reach consumer prices, which have risen by a quarter in the past two years and 45% over three years.

Similarly, commodity prices for coffee rose sharply at the end of 2023 and continued to climb through 2024, reaching a peak in March 2025. Again, extreme weather played a major role, with drought in key coffee producing regions such as Brazil and Vietnam [1]. According to FAO estimates, it typically takes around one year for changes in raw coffee prices to filter through to retail prices, with effects lasting at least four years [8].

Anna Taylor OBE, Executive Director of the Food Foundation said: “We are seeing the price of certain products being driven up by extreme weather. This is a worrying trend. Government must treat this as a food security issue, and take steps to build the resilience of farming and our supply chains to shocks, so we can better buffer them. Otherwise, the weekly shop will keep getting more unpredictable – and more unaffordable – for millions of households.”

In 2022–23, climate impacts added an estimated £360 to the average UK household food bill [9]. Government forecasts suggest that the climate exposure of British households will deepen, with over half of UK fruit and legume imports coming from climate-vulnerable countries by 2050 [6].

Chris Jaccarini, food and farming analyst at the Energy and Climate Intelligence Unit (ECIU) said: “Central banks are clear that climate change increases food prices in ways they cannot control or predict, creating systemic risk to our food system [10]. There is no monetary policy lever they can pull to address this. Only by reducing our emissions to net zero and bringing balance back to our climate will we limit the impact of climate change on food prices in the future.”

ENDS

Notes to editors: 

1. The analysis, which focused on butter, beef and veal, whole milk, chocolate and coffee, is available to download here. 

2. August Bank of England Monetary Policy Committee Report and recent interview with Isabel Schnabel, Member of the Executive Board of the ECB

3. ECIU Comment on 2025 Defra Harvest Statistics

4. https://www.worldweatherattribution.org/autumn-and-winter-storms-over-uk-and-ireland-are-becoming-wetter-due-to-climate-change/

5. https://www.nature.com/articles/s41558-018-0376-6

6. Government -produced UK Food Security Report 2024.

7. https://www.worldweatherattribution.org/dangerous-humid-heat-in-southern-west-africa-about-4c-hotter-due-to-climate-change/

8. Reuters reporting on FAO report.

9. ECIU, Climate, Fossil Fuels and UK Food Prices: 2023

10. https://www.ecb.europa.eu/pub/pdf/scpwps/ecb.wp2821~f008e5cb9c.en.pdf

For more information or for interview requests:

George Smeeton, Head of Communications, ECIU, Tel: 07894 571 153, email: george.smeeton@eciu.net

(Bloomberg) — Asian shares rose Tuesday, buoyed by upbeat US earnings and indications that tensions between Washington and Beijing were easing.

Benchmarks in Japan and Australia climbed with stocks in South Korea jumping over 1% at the open. US equity futures edged higher after the S&P 500 and the Nasdaq 100 both rose more than 1% Monday. A gauge of US-listed Chinese companies advanced 2.4%, its best showing in a week. Gold extended gains in early Asian trading, even as some warned about a potential bubble in the precious metal.

The S&P 500 logged its biggest two-day gain since June on Monday, with about 85% of companies beating profit estimates so far. Strong third-quarter earnings helped temper worries over the US government shutdown, while hopes of progress in US-China trade talks lifted sentiment. President Donald Trump reiterated his threat to follow through on a tariff hike on Chinese goods “if there isn’t a deal” by Nov. 1, but said he plans to meet President Xi Jinping next week.

“Thank God for earnings season,” said Callie Cox at Ritholtz Wealth Management. Given the US government shutdown, analysts have been deprived of data for weeks, leading to “panic around headlines,” she said.

Earlier this month, markets were roiled as Trump raised the prospect of a sky-high tariff rate, citing China’s “hostile” export controls. Soybean futures rallied Monday, with growers holding out hope that Trump will make a deal with China to restart stalled American exports.

Separately, shares of critical mineral producers jumped in Sydney on Tuesday after Trump signed an agreement with Australian Prime Minister Anthony Albanese to boost America’s access to rare earths and other key materials.

US Inflation

After being delayed by the US government shutdown, the Bureau of Labor Statistics will release the September consumer price index on Friday. The data, originally slated for Oct. 15, will give Federal Reserve officials a critical piece of information on inflation ahead of their Oct. 30 meeting.

Economists in a Bloomberg survey forecast the core CPI, which excludes food and fuel for a better snapshot of underlying inflation, to have climbed 0.3% for a third straight month as higher import duties continue to gradually filter through to consumers. The projected monthly gain will keep the annual core CPI at 3.1%.

“September core CPI likely moderated slightly due to cooling services prices offsetting additional tariff passthrough into goods prices,” said Oscar Munoz at TD Securities. “Energy prices likely boosted headline CPI.”

Friday’s inflation data may take on greater importance due to the government shutdown-driven data drought, said Rick Gardner at RGA Investments. He still sees a Fed cut in October and noted that a key test will be big tech earnings, with investors looking for clarity on how spending on artificial intelligence is leading to profitability.

“We are seeing the typical seasonal volatility in October, but the recent swings have been relatively shallow by historical standards, as the buy-the-dip mentality appears to be in play,” Gardner said.

Some of the main moves in markets:

Stocks

S&P 500 futures were little changed as of 9:16 a.m. Tokyo time Hang Seng futures rose 1.4% Japan’s Topix rose 0.4% Australia’s S&P/ASX 200 rose 0.6% Euro Stoxx 50 futures rose 0.2% Currencies

The Bloomberg Dollar Spot Index was little changed The euro was little changed at $1.1651 The Japanese yen was little changed at 150.61 per dollar The offshore yuan was little changed at 7.1226 per dollar The Australian dollar was little changed at $0.6518 Cryptocurrencies

Bitcoin fell 0.7% to $110,323.19 Ether fell 0.7% to $3,971.05 Bonds

The yield on 10-year Treasuries was unchanged at 3.98% Japan’s 10-year yield declined one basis point to 1.660% Australia’s 10-year yield declined three basis points to 4.12% Commodities

West Texas Intermediate crude fell 0.1% to $57.45 a barrel Spot gold was little changed This story was produced with the assistance of Bloomberg Automation.

©2025 Bloomberg L.P.