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2h ago

UK Shop Price Inflation Accelerates to 1.4% as Non‑Food Deflation Fades

Retailers warn policy-driven cost increases are pushing prices higher.

Customers buy fresh produce from a fruit and vegetable stall on Surrey Street market in Croydon, south London, Britain, February 26, 2024. REUTERS/Hannah McKay
The warm summer weather drove up demand for, and the prices of, gardening products
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Overview

  • Overall shop prices rose 1.4% year over year in September, up from 0.9% in August, the fastest pace since February 2024, according to BRC-NIQ.
  • Food inflation held at 4.2% while non-food prices were down just 0.1% from a year earlier, pointing to the near end of an 18‑month non-food deflation run.
  • The BRC attributes the pressure to global supply strains, higher employers’ national insurance and wage costs, and rising farm energy and labour bills keeping dairy and beef prices elevated.
  • A new government packaging tax due in October is expected to add further upward pressure, as retailers caution that additional levies would keep prices higher for longer.
  • DIY and gardening prices increased, back-to-school electricals saw promotions, and NIQ says retailers will keep deals flowing as consumers grow more price-sensitive while the Bank of England projects CPI around 4%.