Britain's main retail trade body warned on Tuesday that shops are now increasingly unable to absorb the impact of rising costs, after its data showed prices increased at the fastest pace in two and a half years this month, Reuters reported.

Source: Reuters

The British Retail Consortium (BRC) said shop prices in October were 2.1% higher than a year ago, the biggest increase since February 2024 and up from a 1.4% annual increase in September. "The dam is starting to break on the huge wave of costs retailers have absorbed over the last two years," BRC Chief Executive Helen Dickinson said, calling on finance minister John Healey to lower retailers' property taxes and employment costs in his first annual budget on Wednesday.

2.1%UK shop price rise in October, year on year
2.9%Food price inflation, highest since April
1.7%Non-food inflation, highest since Dec 2023
3.5%Official UK CPI in September, an 11-month high

BRC food price inflation was 2.9% in October, its highest since April and up from 2.5% in September. Ambient food price inflation rose to its highest since September 2025 at 3.2%, up from 2.2% in September, while fresh food inflation was unchanged at 2.6%. Non-food inflation rose to 1.7% from 0.8%, its highest since December 2023, with particularly sharp rises for furniture, flooring and home improvement goods.

The BRC said prices were being pushed up by higher transport and energy costs, as well as increases in employment costs and packaging levies. Official consumer price inflation, which covers a wider range of goods and services, rose to an 11-month high of 3.5% in September from 3.1% in August.

Bank of England Governor Andrew Bailey said this month that businesses had so far largely absorbed higher energy costs caused by the US-Iran war, unlike after Russia's invasion of Ukraine in 2022, reducing the need to raise interest rates. Food price inflation has been slower to pick up than first predicted, with the Food and Drink Federation trade body now expecting it to peak next year. The BRC data is based on prices collected from October 1-7.

For households across Britain — including the country's large Punjabi and South Asian communities, many of whom also run small shops and convenience stores — the figures mean both sides of the counter are being squeezed: families paying more for weekly food shopping, and small retailers facing the same rising transport, energy and employment costs the BRC blames for the increase.