UK Shop Price Inflation Hits Two-Year High in August

UK shop price inflation reached a two-year high in August, with overall prices rising 1.5% from a year earlier. Food prices saw a sharper increase of 2.8%. The British Retail Consortium attributed the spike to higher energy and input costs resulting from conflict in Iran, which has disrupted global shipping and energy markets.

Retailers including Next Plc and J Sainsbury Plc warned that prolonged conflict risks further increasing import costs. These businesses are already managing higher taxes and wages, and the recent price jump follows the end of summer promotional activity.

Industry experts expect supply chain pressures to persist. Helen Dickinson, CEO of the British Retail Consortium, noted that rising bills will put further pressure on household budgets in the coming months. Additionally, Mike Watkins of NIQ predicted that price competition among retailers will intensify as the UK enters the autumn season.