UK shop price inflation slowed to 1.4 per cent in September from 1.5 per cent in August, as retailers maintained promotions and absorbed rising costs despite pressures linked to the Iran war, according to British Retail Consortium (BRC) data published on 29 September.

The BRC said food inflation fell to 2.5 per cent from 2.8 per cent, with promotions lowering meat and dairy prices. Poor harvests across Europe pushed up fruit prices, while elevated global commodity prices kept chocolate and confectionery costs high.

Non-food inflation fell to 0.8 per cent from 0.9 per cent, with the BRC attributing the reduction to strong discounting of back-to-school essentials. Prices for books, stationery, footwear and electrical goods were among those affected by promotions.

Helen Dickinson, chief executive of the BRC, said retailers were facing a growing burden of additional costs as they sought to keep prices down for consumers. “Retailers have absorbed wave after wave of extra costs, but there is a limit to what businesses can shoulder,” she said.

Dickinson said higher business rates due in April, alongside increased employment costs, energy bills and packaging taxes, would create further pressure on retailers. She called on chancellor John Healey to freeze the planned business rates increase and remove shops from the business rates surtax in the government’s 28 October Budget.

The BRC survey, which covered prices collected between 1 and 7 September, showed fresh food inflation fell to 2.6 per cent from 3.0 per cent, while ambient food inflation declined to 2.2 per cent from 2.5 per cent.

Mike Watkins, head of retailer and business insight at NIQ, said retailers had continued using promotions and some had introduced price cuts to support demand as shoppers reduced spending after the summer. “All of which is helping to keep inflation lower than a year ago,” he said.

The BRC said overall shop price inflation remained above its three-month average of 1.3 per cent, while food inflation was in line with its three-month average of 2.5 per cent. The figures contrast with the wider UK consumer price index, which reached 3.1 per cent in August, with Reuters reporting expectations that it could exceed 4 per cent in early 2027 as the energy impact of the Iran war feeds through.

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