0052 GMT - Food inflation in Australia will peak for Coles and Woolworths in 2Q FY 2027, reckons UBS. Inflation is accelerating due to the Middle East conflict. For consumers, this is initially manifesting itself as higher fuel costs, which could worsen after a fire at Viva Energy's Geelong refinery. UBS expects food inflation to increase steadily. It will be led by fresh produce in 4Q of FY 2026, due to fuel surcharges and reduced availability. In FY 2027, inflation will be driven by fresh produce and so-called dry grocery items. UBS forecasts an inflation peak of 5.5% in 2Q of FY 2027, below the highest level during Covid of 7.7%. "A full reversal (is) not expected as cost of goods pressure is expected to remain elevated," says analyst Shaun Cousins. (david.winning@wsj.com; @dwinningWSJ)

(END) Dow Jones Newswires

April 19, 2026 20:52 ET (00:52 GMT)

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