UK Shop Price Inflation Slows to 1.4% as Retailers Absorb Rising Costs

UK shop price inflation eased to 1.4% in September from 1.5% in August on the BRC-NIQ monitor of prices from 1-7 September, below the 1.5% market expectation. Food inflation slowed to 2.5% from 2.8% and non-food to 0.8% from 0.9%. Fresh food slowed to 2.6% from 3.0%; ambient food fell to 2.2% from 2.5%. Helen Dickinson said promotions helped bring down meat and dairy prices, though poor European harvests pushed up fruit prices and high commodity prices kept chocolate and confectionery elevated. Mike Watkins said shoppers reset spend in September and sales growth slowed after the hot summer. What's contested: Dickinson said retailers have absorbed wave after wave of extra costs, but there is a limit to what businesses can shoulder. Watkins said retailers will still need to absorb cost increases wherever possible in a tighter Q4. Dickinson called the 28 October budget a fork in the road and urged Chancellor John Healey to freeze the business rates rise and remove shops from the surtax, or risk pushing more costs onto consumers. Higher business rates hit in April. UK CPI rose to 3.1% in August and is expected to surpass 4% in early 2027.