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2h ago

UK Shop-Price Inflation Quickens to 1.4% as Food Costs Stay Elevated

Retailers warn new taxes would keep prices higher for longer ahead of the November Budget.

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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

  • The BRC-NIQ survey shows overall shop prices rose 1.4% year on year in September, up from 0.9% in August.
  • Food inflation held at 4.2% while non-food prices were down just 0.1%, with DIY and gardening costs rising and some back-to-school items discounted.
  • The BRC says higher employers’ national insurance, wage increases and a new packaging levy are pushing up costs, estimating a roughly £7bn hit to retailers this year.
  • The BRC is urging Chancellor Rachel Reeves to avoid fresh tax or levy increases in the Budget, warning they would keep shop prices elevated.
  • The Bank of England expects headline CPI to be about 4% for September, a backdrop that could weigh on the pace of interest-rate cuts as shoppers grow more price-sensitive.