UK Shop Price Inflation Hits 2.5-Year High of 2.1% as BRC Warns Retailers Can No Longer Absorb Costs

British shop prices rose 2.1% year-on-year in October, the fastest pace since February 2024 and up from 1.4% in September, the British Retail Consortium said Tuesday. BRC Chief Executive Helen Dickinson warned "the dam is starting to break on the huge wave of costs retailers have absorbed over the last two years," and urged finance minister John Healey to cut retail property taxes and employment costs in his first annual budget on Wednesday. Food price inflation reached 2.9%, its highest since April, while ambient food inflation climbed to 3.2% from 2.2%. Non-food inflation jumped to 1.7% from 0.8%, the highest since December 2023, led by furniture, flooring and home improvement goods. The BRC attributed the pressure to higher transport, energy and employment costs and packaging levies. Official CPI inflation rose to an 11-month high of 3.5% in September. Bank of England Governor Andrew Bailey said this month that businesses have largely absorbed energy costs from the US-Iran war, reducing the need to raise interest rates. The BRC data covers prices collected October 1-7.