UK shop price inflation hits two-year high in August

(Sharecast News) - UK shop price inflation hit a two-year high in August amid higher energy prices, according to figures released on Tuesday. The BRC-NIQ shop price index showed that shop price inflation rose to 1.5% year-on-year last month, following growth of 0.9% in July. This was above the three-month average of 1.2%.

Food inflation increased to 2.8% following 2.2% growth in July, while non-food inflation rose to 0.9% in August, following 0.2% growth the month before.

Fresh food inflation fell to 3% in August from 3.1% in July, while ambient food inflation increased to 2.5% from 1.1%.

Helen Dickinson, chief executive of the British Retail Consortium, said: "Shop price inflation rose to its highest level in over two years, albeit well below the headline consumer price index. The impact of higher energy, input and commodity costs is beginning to filter through into prices, particularly for ambient foods which are typically imported and processed. In non-food, electrical prices rose amid the ongoing AI boom, which is forcing up the price of memory chips and storage. Meanwhile, retailers kept clothing prices low to offer value for families getting ready for the new school year.

"The months ahead look challenging for households, with rising bills putting further pressure on budgets. Retailers are facing persistently high operating costs, limiting their ability to absorb further increases without impacting investment, jobs and prices. If the Government is serious about supporting growth while keeping the cost of living in check, it must address the cost of doing business, including by tackling the growing burden of business rates, packaging and employment taxes."