It is the 16th consecutive month of decline, providing further relief for businesses and consumers after several years of high inflation. October also recorded month-on-month deflation of -0.4%, with prices falling in six of the Index’s 10 categories. In year-on-year terms, fish was the only category to experience deflation, while vegetables and sugar, jam, syrups and chocolate continued to report the highest inflation.

While the short-term trend is positive, the government’s recent Autumn Budget has introduced significant uncertainty into the outlook for foodservice prices in 2025. The Foodservice Price Index report projects that the Budget measures will add +2.3% to the previously forecasted rate of inflation. If additional wage and National Insurance costs are passed up the supply chain in full, food and drink inflation could rise sharply again next year and exacerbate the cost-of-living crisis.

Shaun Allen, CEO of Prestige Purchasing, said: “While the continued easing of year-on-year inflation is encouraging, the potential impact of the Autumn Budget is a serious concern. The foodservice sector is still grappling with ongoing volatility, and the possibility of further significant price increases in 2025 adds another layer of complexity. Operators need to remain vigilant and closely monitor the market to manage these additional challenges effectively.”

Reuben Pullan, senior insight consultant at CGA by NIQ, said: “Sixteen successive months of inflation decline has brought welcome respite for hospitality ahead of the crucial Christmas and New Year period. However, the Budget’s new burden on employers threatens the fragile recovery and will undermine the confidence of both businesses and consumers. This is a resilient and entrepreneurial sector with a bright long-term future, but cost pressures are likely to make for a difficult trading environment for some time to come.”