UK SHOP price inflation swung to its highest level for two years last month, as accelerating food costs pressed on consumer budgets, according to new figures.
Prices for tech products also increased over the month as chip and memory shortages linked to the AI boom impacted the supply and cost of electricals.
The latest increase represents the sharpest rise since February 2024, when it was reported at 2.5% for the month Credit: Getty
British Retail Consortium (BRC)-NIQ figures showed that shop prices are now 1.5% higher than a year ago, lifting from a rise of 0.9% in July.
The latest increase represents the sharpest rise since February 2024, when it was reported at 2.5% for the month.
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It comes after a recent uptick in wider inflation as spikes in oil and gas prices linked to the conflict in the Middle East pass through into energy costs for businesses and households.
Food inflation reversed a recent downward trend to jump by 2.8% for August, compared with the same month a year earlier.
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It represented a significant increase from inflation of 2.2% in July.
Experts linked the acceleration to higher energy costs in supply chains and the end of summer promotions and discounting.
Fresh food inflation slowed slightly to 3%, while the price rises for ambient foods increased to 2.5% year-on-year.
Inflation on products other than food also increased, rising to a two-year-high of 0.9% for the month.
This was significantly linked to an increase in the cost of technology, such as laptops, as soaring demand for memory driven by the AI industry increased costs for tech manufacturers.
Helen Dickinson, chief executive of the BRC, 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.”
Mike Watkins, head of retailer and business insight at NIQ, said: “While the increase in both food and non-food inflation is not unexpected, particularly as some of the summer promotional activity seen in recent months comes to an end, retailers continue to keep prices low, helping consumers manage rising household costs such as energy and fuel.
“However, pressures are continuing to build across supply chains, and we can expect price competition to intensify as we move into the autumn months.”
