Non-food prices drive up inflation in September

Shop price inflation has jumped to 1.4% as global factors combined with higher national insurance and wage costs play out in prices for consumers, figures show.

The increase from August’s 0.9% came despite food inflation holding steady at 4.2%, and was driven by rising non-food prices, according to the British Retail Consortium (BRC)-NIQ Shop Price Monitor.

While non-food prices remain 0.1% lower than a year ago, this is a significant increase on August when they were 0.8% cheaper.

DIY and gardening saw rising prices, while some back-to-school categories continued to see reductions as retailers offered promotions on electricals such as laptops ahead of the new academic year.

Meanwhile, food price inflation remained steady at 4.2% after seven consecutive months of rises, but the BRC said increased labour and energy costs continued to put pressure on many farmers, particularly of cattle, with dairy and beef prices remaining high.

BRC chief executive Helen Dickinson said: “A year and a half of non-food deflation looks set to come to an end, as inflationary pressures spread beyond food.

“Households are finding shopping increasingly expensive. The impact on retailers and their supply chain of both global factors and higher national insurance and wage costs is playing out in prices for consumers.

“The new packaging tax, set to take effect in October, will put further upward pressure on inflation.

“While retailers continue to absorb higher costs as much as possible and deliver value to customers, any further tax rises in the upcoming budget would keep shop prices higher for longer.

“Ultimately, it is British households who will bear the consequences, positive or negative, of the Chancellor’s decisions.”

Mike Watkins, head of retailer and business insight at NIQ, said: “With inflationary pressures persisting, many shoppers remain concerned about their personal finances and are becoming increasingly price-sensitive.

“As a result, retailers are likely to continue offering promotions and deals in the coming weeks to help maintain sales momentum.”