UK shop prices rise at fastest rate for two years in cost-of-living blow to households
Inflation on products other than food have also increased
Shop price inflation in the UK has risen to its highest level in two years, new figures have revealed.
Listen to this article
Accelerating food costs pressed on consumer budgets, and prices for tech products also increased over the month as chip and memory shortages linked to the AI boom impacted the supply and cost of electricals.
Shop prices are now 1.5% higher than a year ago, lifting from a rise of 0.9% in July, according to British Retail Consortium (BRC)-NIQ.
The latest increase represents the sharpest rise since February 2024, when it was reported at 2.5% for the month.
Read more: 'He’s going to kill me': Domestic abuse victims warn Early Release Scheme will put lives at risk
Read more: BBC sparks fury after broadcasting rapper's 'f*** Nigel Farage' comments during Reading festival set
It comes after a recent uptick in wider inflation as spikes in oil and gas prices linked to the conflict in the Middle East pass through into energy costs for businesses and households.
Food inflation reversed a recent downward trend to jump by 2.8% for August, compared with the same month a year earlier.
Fresh food inflation slowed slightly to 3%, while the price rises for ambient foods increased to 2.5% year-on-year.
Inflation on products other than food also increased, rising to a two-year-high of 0.9% for the month.
Helen Dickinson, chief executive of the BRC, said: "Shop price inflation rose to its highest level in over two years, albeit well below the headline Consumer Price Index.
"The impact of higher energy, input and commodity costs is beginning to filter through into prices, particularly for ambient foods which are typically imported and processed.
"In non-food, electrical prices rose amid the ongoing AI boom, which is forcing up the price of memory chips and storage."
Mike Watkins, head of retailer and business insight at NIQ, added: "While the increase in both food and non-food inflation is not unexpected, particularly as some of the summer promotional activity seen in recent months comes to an end, retailers continue to keep prices low, helping consumers manage rising household costs such as energy and fuel.
"However, pressures are continuing to build across supply chains, and we can expect price competition to intensify as we move into the autumn months."