Key facts
- Shop prices rose 2.1% year-on-year in October, the fastest pace in two-and-a-half years.
- Food inflation increased to 2.9% year-on-year in October, up from 2.5% in September.
- Non-food inflation more than doubled to 1.7% year-on-year in October.
- Brent crude oil reached $117 a barrel, above the $70 average before February's attacks on Iran.
- UK consumer prices index rose to 3.5% last month.
- Retailers had largely absorbed higher raw material costs due to weak consumer demand.
Shop price inflation in the UK has reached its highest level in two and a half years, with the British Retail Consortium warning that retailers can no longer fully absorb rising costs. The lobby group reported that shop prices increased by 2.1% year-on-year in October, up from 1.4% in September. This rise is attributed to higher energy and food ingredient costs, exacerbated by the Middle East conflict. Food inflation climbed to 2.9% in October, while non-food inflation more than doubled to 1.7%. Brent crude oil prices have surged to $117 a barrel, contributing to a 3.5% rise in the UK consumer prices index last month. Retailers had previously absorbed these costs due to weak consumer demand, but declining consumer confidence since the summer suggests this is no longer sustainable. Bank of England officials are expected to raise interest rates next week, and persistent retail price rises could prompt further increases. Finance Minister John Healey faces pressure to address the cost of living in his upcoming budget.