FX.co ★ UK Shop Price Inflation Slows in September

UK shop price inflation eased to 1.4% year-on-year in September 2026, down from 1.5% in August and slightly below market expectations of 1.5%. Despite the slowdown, it remained above the three-month average of 1.3%.

Food price inflation fell to 2.5% from 2.8%, supported by promotions that reduced the cost of meat and dairy. However, poor harvests in Europe pushed up fruit prices, while elevated commodity costs kept chocolate and confectionery prices high.

Non-food inflation also edged down, slipping to 0.8% from 0.9%, as heavy discounting lowered the prices of back-to-school essentials.

The British Retail Consortium noted that retailers are continuing to absorb higher business rates, employment costs, energy bills and packaging taxes, but cautioned that there is a limit to how much additional cost pressure businesses can bear.

In contrast, the UK’s broader CPI inflation rate rose to 3.1% in August and is projected to exceed 4% in early 2027, driven by higher energy prices linked to the war in Iran.