UK shop price inflation hits 2.1% in October, highest since 2024
UK shop price inflation climbed to 2.1% year on year in October, up from 1.4% in September, its highest level in two and a half years, according to the British Retail Consortium, as retailers begin passing on higher energy and food ingredient costs.
UK shop price inflation hits 2.1% in October, highest since 2024
Prices rise across food and non-food
The British Retail Consortium's latest figures show shop price inflation accelerating across the board. Food inflation rose to 2.9% year on year in October, up from 2.5% in September. Non-food inflation, which covers items such as clothing and footwear, more than doubled over the same period, from 0.8% to 1.7%.
The BRC attributed the jump to retailers starting to pass on higher energy and food ingredient costs that have built up since the Middle East conflict broke out. Until October, shops had largely absorbed the higher cost of raw materials, mainly because demand from customers was weak.
- Food inflation: 2.9% in October, against 2.5% in September
- Non-food inflation: 1.7% in October, up from 0.8% in September
- Overall shop price inflation: 2.1% in October, compared with 1.4% in September
Retailers say the dam is starting to break
Helen Dickinson, the BRC's chief executive, said retailers could no longer hold prices down after two years of taking on higher costs themselves.
"The dam is starting to break on the huge wave of costs retailers have absorbed over the last two years"
She noted there had been heavy discounting ahead of Halloween, but said supermarkets could no longer keep the prices of tins and packets on their shelves from going up.
The energy backdrop explains why: Brent crude oil recently reached $117 a barrel, well above the $70 average in the months before the US and Israel attacked Iran in February, and gas prices have risen sharply too, pushing the UK consumer prices index to 3.5% last month. Consumer confidence has declined sharply since the summer, when it became clearer the conflict was unlikely to end swiftly.
Pressure on the chancellor before the budget
The figures land on chancellor John Healey days before his first budget on Wednesday. He also faces intense pressure from his own backbenchers, who are concerned that the high cost of living is harming many of their constituents.
Low-income families feel the squeeze
A report by Ruth Patrick, professor of social and public policy at the University of Glasgow, sets out how the rising cost of living is landing on low-income families. Patrick leads Changing Realities, a project tracking 100 low-income families, and the report draws on in-depth interviews with 70 participants, of whom 67 shared the strategies they had used to reduce costs in the previous month.
According to the report, high petrol and diesel prices are hitting families who need to transport disabled children to and from school, as well as workers who commute by car. With petrol above £1.75 a litre in many places and diesel often above £2 a litre, Patrick said, work can stop paying altogether.
In the last month:
- 73% of participants shopped in the reduced-items aisle
- 62% changed the food they buy
- 63% left the heating off even when cold
Rosie L, a participant living in rural Scotland, said public transport where she lives is neither accessible nor reliable and that losing the car would affect every single aspect of their lives, particularly as her children are disabled.
"It's getting to a point where I don't know how we are going to keep managing to run our car"
Patrick said the help provided so far by governments and local authorities does not match the scale of the problem. She argued the budget provides an opportunity to make good on Andy Burnham's pledge that his will be a "cost of living government", and that there is particular scope in restoring the real value of child benefit.
Bank of England officials are expected to raise interest rates next week from 3.75% to 4%. If retail price rises persist, many of the Bank's nine-member monetary policy committee may raise rates still further in December or the new year.
