Prices at major UK retailers rose at the fastest pace since February 2024, driven by higher costs for food, furniture, and health and beauty products. The British Retail Consortium’s shop price index recorded a 1.5% annual increase in January, up from 0.7% in December. Food prices rose 3.9% compared with a year earlier, the largest increase since October 2025, while non-food prices increased 0.3%, marking the biggest annual rise since February 2024.
BRC Chief Executive Helen Dickinson noted that inflation has not yet peaked, with shop price inflation rising due to high business energy costs and the impact of National Insurance increases. Meat, fish, and fruit prices were particularly affected.
Official consumer price inflation data for December, which covers a wider range of goods and services, showed a 3.4% increase, up from 3.2%. Bank of England Governor Andrew Bailey expects CPI to fall close to 2% by April or May, as one-off price changes in regulated prices and taxes take effect. Food and non-alcoholic drink prices rose 4.5% year-on-year, slightly below the 5.3% forecast from November.
The April 2025 rise in employers’ National Insurance contributions by £25 billion ($34 billion) particularly impacted retail sectors with a higher share of lower-paid and part-time staff. The BRC data reflects prices recorded from January 1 to January 7.
