UK Retailers Warn of 2025 Price Hikes as Rising Costs Strain Businesses

Food prices are projected to increase by 4.2% later this year, driven by higher taxes, wage increases, and new levies, according to industry leaders.

The British Retail Consortium (BRC) forecasts food price inflation will average 4.2% in the second half of 2025, with non-food prices also expected to rise.
Retailers face £7 billion in additional costs this year due to government policies, including higher employer national insurance contributions, a national living wage increase, and new packaging levies.
December 2024 saw a temporary dip in overall shop prices, driven by Black Friday discounts, but analysts warn this deflationary trend will not continue.
Industry leaders urge the government to reform business rates without increasing costs for stores, citing the need to mitigate the financial pressures on retailers and consumers.
Analysts predict rising food prices will complicate efforts by the Bank of England to lower interest rates in 2025, adding to economic challenges for households.