Key facts
- British retailers raised prices by the most in over two years in August.
- The BRC shop price index reached an annual 1.5% in August, up from 0.9% in July.
- Higher energy prices contributed to increased costs for processed foods.
- The AI boom led to higher prices for consumer electronics due to increased demand for memory chips and storage.
- BRC food price inflation hit 2.8% in August, and non-food inflation rose to 0.9%.
British retailers increased prices at the fastest pace in over two years in August, according to data from the British Retail Consortium (BRC). The shop price index rose to an annual 1.5% in August, up from 0.9% in July, marking the highest level since February 2024.
BRC Chief Executive Helen Dickinson attributed the rise to higher energy, input, and commodity costs filtering through to prices, particularly for processed foods. She also noted that the ongoing AI boom is driving up the cost of consumer electronics due to increased demand for components like memory chips and storage.
Specifically, BRC food price inflation climbed to a four-month high of 2.8% in August, compared to 2.2% in July. Non-food inflation also saw a significant increase, rising to 0.9% from 0.2% in July, its highest point since February 2024.
Consumer price inflation, as measured by the Office for National Statistics (ONS), which covers a broader range of goods and services, reached a four-month high of 2.9% in July. The Bank of England anticipates that consumer price inflation will peak at 3.2% in October and November, with food price inflation projected to reach 3.5% by December.