Retail prices are rising at the fastest pace in more than two years

Retail prices are rising at the fastest pace in more than two years, putting pressure on the cost of living among British households.

The British Retail Consortium (BRC) said prices rose 1.5 percent last month, up from 0.9 percent the month before and the highest since February 2024.

It comes at a time when consumers are already being hit by a series of energy bill increases – and threatens to derail Andy Burnham’s ambitions to ease the burden on household finances.

The BRC retail price index is a narrower benchmark than the official one inflation figures, covering a wider range of goods and services.

But its rise is still likely to heighten concerns that hardworking families will find it harder to make ends meet, making them less likely to forgo essentials.

BRC chief executive Helen Dickinson said: ‘The coming months look challenging for households, with rising bills putting further pressure on budgets.’

She said rising operating costs for retailers were making it harder for them to control prices without affecting investment and employment.

It comes at a time when businesses are being hit by higher employer contributions, rising minimum wages and failed business rates reforms.

“If the government is serious about supporting growth while controlling the cost of living, it must tackle the cost of doing business, including by tackling the growing burden of business rates, packaging and labor taxes,” Dickinson said.

The BRC figures show that non-food inflation rose sharply from 0.2 percent in July to 0.9 percent in August, the highest level since February 2024.

And food inflation rose from 2.2 percent to 2.8 percent, the highest level since April this year.

Dickinson said the impact of higher energy and raw material costs on businesses was “starting to filter through to prices”.

This was especially true for so-called “ambient foods” that can be stored at room temperature, such as canned goods or breakfast cereals, which are typically imported and processed, adding costs.

Meanwhile, electricity prices are rising as the artificial intelligence (AI) boom drives up the price of memory chips and storage, Dickinson added.

Broader inflation is rising as a result of Donald Trump’s Iran war, which has choked oil and gas supplies from the Middle East.

That has pushed energy prices up significantly, with regulator Ofgem announcing last week that the cap on household energy bills will rise by 4 percent from October to a three-year high, while forecasters predict a further 9 percent increase in January.