British Shop Price Inflation Slows Amid World Cup Discounts

British shop price inflation slowed in July, reaching its lowest pace since December, thanks to supermarket discounts on alcohol and snacks during the men's soccer World Cup. The British Retail Consortium reported that average shop prices increased by only 0.9% year-over-year, down from 1.2% in June. On a monthly basis, prices actually fell by 0.1%. Food price inflation slowed to 2.2% in July, the lowest reading since February 2025.

The consortium's chief executive, Helen Dickinson, said that retailers had competed aggressively to keep price increases in check through summer promotions across food and other goods. Some clothing and footwear chains also cut prices on seasonal items.

Despite this slowdown, broader cost pressures remain a concern. The Bank of England expects consumer inflation to rise to just over 3.25% later this year, driven largely by higher energy costs linked to the U.S.-Iran war.