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UK store worth inflation in September rose to the best charge because the spring of final yr as excessive beef and dairy costs continued to pressure family budgets, trade information has proven.
The British Retail Consortium mentioned on Tuesday that store costs rose at an annual charge of 1.4 per cent in September, up from 0.9 per cent final month and the best since March 2024.
The trade physique’s store worth index, which supplies an early indication of pricing pressures forward of official information on October 22, confirmed that meals inflation remained elevated. Non-food store costs, in the meantime, registered a smaller decline than within the earlier month.
The figures underline the problem going through chancellor Rachel Reeves as she seeks to carry residing requirements whereas fixing public funds.
On the Labour convention on Monday, she urged MPs and activists to “have faith” as she set the stage for a tax-raising Finances on November 26, geared toward balancing the books.
Helen Dickinson, chief govt of the BRC, mentioned households had been discovering purchasing “increasingly expensive”.
She added: “The impact on retailers and their supply chain of both global factors and higher national insurance and wage costs is playing out in prices for consumers.”
From April, retailers and different companies have confronted an increase within the nationwide residing wage and in employers’ nationwide insurance coverage contributions.
Final week, the OECD membership of developed economies mentioned the UK was set for the best inflation throughout the G7 international locations this yr.
The UK’s headline official inflation determine — which in contrast to the BRC information contains companies — was 3.8 per cent in August, greater than the two per cent within the Eurozone, 2.1 per cent in Germany, 1.6 per cent in Italy and 0.8 per cent in France.
The chancellor earlier this month advised colleagues to prioritise the combat towards inflation, amid fears that the stubbornly excessive charge might depress the expansion the federal government hopes will remedy its fiscal issues.
The BRC mentioned that there have been worth rises for DIY and gardening provides, whereas there have been worth cuts in some back-to-school classes as retailers supplied promotions on electricals equivalent to laptops forward of the brand new tutorial yr.
Consequently, non-food costs declined 0.1 per cent towards September final yr, in contrast with a 0.8 per cent decline in August.
After rising for seven consecutive months, annual meals worth inflation in September stood at 4.2 per cent, unchanged from August, in response to the BRC. The speed was the joint quickest tempo since early 2024.
Dickinson mentioned: “Increased labour and energy costs continue to push up input prices for many farmers, particularly of cattle, with dairy and beef prices remaining high.”
Recent meals inflation was 4.1 per cent in September, unchanged from August however nicely above the three-month common of three.8 per cent.
Meals inflation has been rising additionally in the remainder of Europe because of elevated commodity prices, typically linked to local weather change occasions, however grocery prices are rising quicker within the UK than in lots of international locations.
Dickinson mentioned that along with rising wages, retailers additionally confronted a brand new packaging tax, set to take impact in October, which might put additional upward strain on inflation.
Retailers continued to soak up greater prices as a lot as potential, Dickinson mentioned. However she warned: “Any further tax rises in the upcoming Budget would keep shop prices higher for longer.”
