Prices in British shops rose at their fastest pace since February 2024 this month, driven by persistently high food costs and signs that the decline in non-food prices is nearing an end, according to the British Retail Consortium (BRC).
- Overall shop prices climbed 1.4% year-on-year in September, up from 0.9% in August.
- Food prices remained 4.2% higher than a year earlier, while non-food items fell just 0.1%, compared with a 0.8% drop in August.
BRC chief executive Helen Dickinson said households are feeling the strain from more expensive shopping, with higher wage and insurance costs adding to global pressures. The group urged Finance Minister Rachel Reeves not to impose new levies in November’s budget, warning they would further push up consumer prices.
Reuters adds BoE context:
The Bank of England expects the broader CPI measure to rise to 4% in September, double its target, and policymakers are divided over whether weakening labour conditions will be enough to bring inflation back down or if they should slow rate cuts. Deputy Governor Dave Ramsden noted food prices continue to weigh heavily on inflation perceptions, particularly dairy and beef, which are being pushed up by rising farm costs and a new packaging levy.
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Eyes on Market-impact:
- Sterling sentiment could firm on signs of sticky UK inflation
- Higher shop prices add weight to arguments for a slower BoE easing path
- UK retailers face pressure as households squeezed by rising food and levy-driven costs.
