UK Shop Price Inflation Eases as Retailers Warn on Cost Pressures

UK shop price inflation slowed in September to an annual rate of 1.4%, down from 1.5% in August, according to a recent survey by the Traders Union. This moderation comes as retailers continue to face pressure from rising costs, including energy-related expenses linked to the Iran war.

Food price inflation eased slightly to 2.5% in September, driven by promotions on meat and dairy products. However, poor harvests in Europe pushed up fruit prices, while high commodity costs kept confectionery prices elevated.

Retailers are bracing for higher business rates due in April, alongside rising employment costs, energy bills, and packaging taxes. BRC Chief Executive Helen Dickinson warned that retailers have absorbed repeated cost increases but face limits on how much more they can shoulder.