UK Shop Prices Jump as Energy Costs Bite
UK shop prices picked up pace in August, driven by higher energy and AI costs. The British Retail Consortium's (BRC) shop price index rose to 1.5% year-on-year from 0.9% in July, marking the highest level since February this year. Food inflation climbed to 2.8% from 2.2%, with retailers passing on increased energy, commodity, and other input costs.
The non-food sector also saw a rise, with inflation reaching 0.9% from 0.2%. The BRC attributed this increase to AI-driven demand lifting memory chip and storage prices, in turn driving up the cost of electrical goods.
These developments are concerning, as shop prices can feed into the UK's official inflation gauge. Consumer price inflation was 2.9% in July, and the Bank of England expects it to peak around 3.2% this fall.