United Kingdom Shop Price Inflation

UK shop price inflation eased to 1.4% year-on-year in September 2026 from 1.5% in August, slightly below market expectations of 1.5%, although it remained above the three-month average of 1.3%. Food price inflation slowed to 2.5% from 2.8%, helped by promotions that lowered meat and dairy prices, while poor European harvests pushed up fruit prices and elevated commodity costs kept chocolate and confectionery prices high. Non-food inflation also eased to 0.8% from 0.9%, as strong discounting reduced the cost of back-to-school essentials. The British Retail Consortium said retailers are absorbing higher business rates, employment costs, energy bills and packaging taxes, but warned there is a limit to how much additional costs businesses can shoulder. Britain’s broader CPI inflation rose to 3.1% in August and is expected to surpass 4% in early 2027 as the Iran war drives higher energy prices.

UK shop price inflation accelerated to 1.5% year-on-year in August 2026 from 0.9% in July, reaching its highest level since February 2024 as rising energy, input, and commodity costs increasingly fed through to retail prices. Food inflation climbed to a four-month high of 2.8% from 2.2%, with particular pressure on ambient foods that are typically imported and processed. Meanwhile, non-food inflation rose sharply to 0.9% from 0.2%, also the highest since February 2024, as strong demand linked to the artificial intelligence boom pushed up prices for memory chips and storage used in consumer electronics. BRC Chief Executive Helen Dickinson said higher costs are beginning to filter through into prices. Broader UK consumer inflation also accelerated to a four-month high of 2.9% in July, while the Bank of England expects CPI inflation to peak at 3.2% in October and November and food inflation to reach 3.5% in December.

UK shop price inflation rose by 0.9% year-on-year in July 2026, falling short of market expectations for a 1.2% gain and marking the slowest increase since December 2025. The latest reading also slowed from a 1.2% rise in the previous month, as widespread summer promotions and supermarket discounts curbed price growth. Food inflation slowed for a sixth straight month to 2.2%, the lowest since February 2025, from 2.4% in the previous month, while non-food inflation eased to 0.2% from 0.6%, despite higher prices for electrical, health, and beauty products due to rising semiconductor and manufacturing costs. On a monthly basis, shop prices fell 0.1%. The British Retail Consortium said retailers intensified discounts on alcohol, snacks, clothing, and footwear during the men's soccer World Cup and summer sales. BRC Chief Executive Helen Dickinson noted that fierce competition continues to limit price increases, though retailers remain under pressure from rising operating costs.