United Kingdom Shop Price Inflation

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.

UK shop price inflation increased by 1.2% year-on-year in June 2026, the same pace as in the previous month and slightly below market forecasts for a 1.3% rise, as easing food price pressures offset a modest pickup in non-food inflation. Food inflation slowed to 2.4%, the lowest since March 2025, from 2.7% in May, with fresh food inflation dropping to 2.8% from 3.4%, supported by bumper strawberry crops, promotions on ice cream, and strong supermarket competition. Meanwhile, non-food inflation edged up to 0.6% from 0.5%, as retailers discounted summer clothing, footwear, and household textiles despite higher underlying costs. BRC Chief Executive Helen Dickinson warned that while competition continues to keep inflation in check, retailers face mounting cost pressures from higher National Insurance contributions, packaging taxes, extreme weather, and geopolitical tensions.