UK shop price inflation picks up in December

(Sharecast News) - Shop price inflation edged higher in December, according to the British Retail Consortium on Tuesday, as food price growth accelerated strongly.

The BRC-NielsenIQ monthly shop price monitor showed a 0.7% year-on-year increase in prices at UK tills in December, up from 0.6% in November.

Food price inflation picked up to an annual rate of 3.3% from 3.0%, with fresh food inflation rising to 3.8% from 3.6% and ambient food inflation increasing to 2.5% from 2.4%.

Meanwhile non-food deflation held steady at -0.6%, with promotional activity ahead of the festive holidays partly responsible for ongoing price falls.

Despite the overall increase in prices, "shoppers still found plenty of value across many Christmas essentials including vegetables, cheeses, and alcohol", according to BRC chief executive Helen Dickinson. "Promotions were also widespread across popular gifting categories, including toys, books, and home entertainment."

However, the BRC said that, despite retailers' best efforts, inflation is likely to "remain sticky" in 2026 as a result of increased public policy costs and regulation.

"2026 must be the year that government works with business to create a policy environment that reduces the pressures bearing down on the industry. This will enable retailers to invest more in keeping their prices down, benefitting households all across the country," Dickinson said.