UK shop price inflation slows despite costs pressures

LONDON: British shop price inflation slowed slightly in September despite rising cost pressures on retailers caused by the Iran ‌war, according to a survey on Tuesday from the British Retail Consortium, which urged the government to do more to help.

"Retailers have absorbed wave after wave of extra costs, but there is a limit to what businesses can shoulder," BRC Chief Executive Helen Dickinson said.

"With higher business rates set to hit in April, alongside rising employment costs, energy bills and packaging taxes, the budget is a fork in the road."

Finance minister John Healey could help to keep prices down in his October 28 tax and spending plan by helping retailers with their business rates bills, she said.

The BRC survey showed:

Annual shop price inflation fell to 1.4 per cent in September from 1.5 per cent in August but was slightly above the three-month average of 1.3 per cent.

Food price inflation slowed to 2.5 per cent from 2.8 per cent as promotions helped bring down meat and dairy prices although poor harvests in Europe pushed up fruit prices and high commodity prices kept chocolate and confectionary prices elevated.

Non-food inflation slowed to 0.8 per cent from 0.9 per cent as strong discounting reduced the cost of back-to-school essentials.

The BRC survey was based on prices collected between September 1 and September 7.

Britain's broader official consumer price inflation index rose to 3.1 per cent in August and is ​expected to surpass 4.0 per cent in early 2027 due to the energy ​price shock caused by the Iran war.