Finance

UK shop price inflation slows despite costs pressures, BRC says

Published by Global Banking & Finance Review

Posted on September 28, 2026

2 min read

· Last updated: September 28, 2026

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UK Shop Price Inflation Eases in September Amid Rising Retail Costs

Overview of September Shop Price Inflation Trends

LONDON, Sept 29 (Reuters) - British shop price inflation slowed slightly in September despite rising costs pressures on retailers caused by the Iran ‌war, according to a survey on Tuesday from the British Retail Consortium which urged the government to do more to help.

Retailers Face Mounting Cost Pressures

"Retailers have absorbed wave after wave of extra costs, but there is a limit to what businesses can shoulder," BRC Chief Executive Helen Dickinson said. "With higher business rates set to hit in April, alongside rising employment costs, energy bills and packaging taxes, the budget is a fork in the road."

Government Response and Policy Recommendations

Finance minister John Healey could help to keep prices down in his October 28 tax and spending plan by helping retailers with their business rates bills, she said.

Key Findings from the BRC Survey

Annual Shop Price Inflation

• Annual shop price inflation fell to 1.4% in September from 1.5% in August but was slightly above the three-month average of 1.3%

Food Price Inflation

Impact of Promotions and Commodity Prices

• Food price inflation slowed to 2.5% from 2.8% as promotions helped bring down meat and dairy prices although poor harvests in Europe pushed up fruit prices and high commodity prices kept chocolate and confectionary prices elevated

Non-Food Inflation

Discounting and Back-to-School Essentials

• Non-food inflation slowed to 0.8% from 0.9% as strong discounting reduced the cost of back-to-school essentials

Survey Methodology

• The BRC survey was based on prices collected between September 1 and September 7

Broader Economic Context

• Britain's broader official consumer price inflation index rose to 3.1% in August and is expected to surpass 4% in early 2027 due to the energy price shock caused by the Iran war.

(Reporting by Suban AbdullaEditing by William Schomberg)

Key Takeaways

Shop price inflation slowed to 1.4% in September from 1.5% in August, though remains slightly above the three‑month average of 1.3% (publicnow.com).
Food inflation eased to 2.5% from 2.8%, helped by promotional deals on meat and dairy, despite elevated fruit and confectionary costs (publicnow.com).
Non‑food inflation dipped to 0.8% from 0.9%, driven by discounting in back‑to‑school items (publicnow.com).
Retailers face rising cost pressures—from business rates, energy, packaging and employment taxes—and urge the government to support in the October 28 budget (brc.org.uk).
The Bank of England notes inflation pressure from the Middle East is moderating but still poses risk, especially to food price expectations in 2026–27 (bankofengland.co.uk).

References

Frequently Asked Questions

What did the BRC report reveal about shop price inflation in September?

The BRC report showed UK shop price inflation slowed to 1.4% in September from 1.5% in August, slightly above the three-month average.

How did food and non-food inflation change in September?

Food inflation slowed to 2.5% from 2.8%, while non-food inflation dropped to 0.8% from 0.9% due to promotions and discounting.

What are the main cost pressures on UK retailers?

Retailers face rising costs from business rates, employment costs, energy bills, and packaging taxes, exacerbated by global events.

What does the BRC urge the UK government to do?

The BRC urges the government to help retailers with business rates to ease cost pressures in the upcoming budget.

How are energy price shocks affecting UK inflation?

The energy price shock, partly due to the Iran war, is expected to push official UK consumer price inflation above 4% by early 2027.

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