UK Shop Prices Surge at Fastest Pace in 19 Months Amid Rising Cost Pressures

UK shop prices accelerated to a 1.4% annual increase in September, marking the sharpest rise in over a year and a half. The uptick, up from 0.9% in August, reflects mounting cost pressures across the retail sector, with DIY and gardening products driving the bulk of the inflation.

While select back-to-school items like laptops saw price declines, broader inflationary forces—including rising payroll taxes, national insurance hikes, and wage bill increases—are squeezing retailers. Helen Dickinson of the British Retail Consortium warns that looming tax rises in the upcoming budget could prolong elevated shop prices, further straining households already grappling with higher living costs.

Retailers brace for additional headwinds as a new packaging tax takes effect next month, a MOVE industry leaders argue will exacerbate price pressures. Over 60 major retailers, including Tesco and John Lewis, have publicly urged the government to halt further tax increases, citing eroding profit margins and unsustainable consumer price growth.