Chocolate Prices Surge Amid UK Inflation at Highest Level in Over a Year

Chocolate prices in the UK increased at the fastest pace on record in May, contributing to an overall rise in food costs, official figures reveal. The main inflation rate remained steady at 3.4% year-on-year, marking the highest level in more than a year.

Food prices have risen for the third consecutive month, reaching 4.4% growth in May — the strongest increase since February last year. Some economists suggest that businesses are passing on recent hikes in employer National Insurance payments to consumers, following increases introduced in April. These measures were announced in last October’s Budget, aimed at raising £25 billion in revenue.

Ruth Gregory, deputy chief economist at Capital Economics, noted the possibility that the recent jump in food prices reflects firms transferring April’s National Insurance Contribution increases onto selling prices.

Despite the rise in food inflation, the overall inflation rate in May remained unchanged from April, according to a revision by the Office for National Statistics (ONS). The Bank of England’s target inflation rate is 2%, and while inflation is currently above that, the central bank is not expected to reduce interest rates from 4.25% at its upcoming meeting.

Supply Challenges Affecting Chocolate Prices

Chocolate prices jumped 17.7% over the past year, marking the sharpest increase since records began in 2016. Poor weather in major cocoa-producing regions such as Ghana and Ivory Coast has damaged harvests. Issues in these countries include government mismanagement of the cocoa sector and a surge in plant diseases.

Jonathan Parkman, head of agriculture at commodities broker Marex, explained that Ghana and Ivory Coast produce over half the world’s cocoa supply. Given the current challenges, he said chocolate prices are unlikely to fall before Christmas.

While food inflation rose, falling travel costs helped partially offset the increase in May. Airfares dropped 5% between April and May, a contrast to a 14.9% increase over the same period last year. The ONS attributed this change to the different timing of Easter and school holidays between 2024 and 2025.

Political Responses and Business Reactions

Chancellor Rachel Reeves framed the government’s investments as supporting Britain’s renewal and improving living standards for workers. However, opposition voices criticized the inflation figures. Shadow Chancellor Mel Stride described the situation as “deeply worrying for families,” blaming tax policies and borrowing for stifling growth and raising prices on essentials.

Business leaders echoed concerns over rising costs. Kris Hamer of the British Retail Consortium said retailers warned since October that Budget-related cost increases would lead to higher prices for shoppers. AO World CEO John Roberts emphasized that taxing businesses and employment does not foster growth.

At the local level, small business owners like Zayna Omer, who runs a coffee stand in Whitstable, noted tighter consumer budgets and changing spending habits. Omer offers discounts to cash-paying customers to offset card fees and fears raising prices could drive her out of business.

There is growing concern that inflation could worsen if oil prices spike due to escalating tensions in the Middle East, particularly the conflict between Israel and Iran. Disruption in the Strait of Hormuz, a critical passage for a fifth of the world’s oil supply, could cause oil and shipping costs to surge.

David Bharier, head of research at the British Chambers of Commerce, warned that many small businesses may struggle to absorb these added pressures.

Featured image credit: Aminat90 via GoodFon

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