UK shop price inflation hits 2.1%: highest since 2024 before the Budget

Prices in British shops are rising at their fastest pace in two and a half years. The British Retail Consortium (BRC) said on Tuesday 27 October 2026 that shop price inflation climbed to 2.1% year on year in October, up from 1.4% in September, as retailers began passing on energy, transport and ingredient costs they had been absorbing since the spring.

The figures, compiled with the data company NIQ, landed a day before Chancellor John Healey delivers his first Budget on Wednesday 28 October. BRC chief executive Helen Dickinson said “the dam is starting to break on the huge wave of costs retailers have absorbed over the last two years”, and warned that October’s jump “is only the beginning” unless the government cuts the costs retailers pay.

What did the BRC shop price index show for October 2026?

The BRC-NIQ Shop Price Monitor is a monthly reading of prices on the shelves of British retailers, covering both food and non-food goods. October’s edition showed every headline measure either rising or holding steady, with no category moving down.

Headline shop price inflation reached 2.1%, well above its three-month average of 1.6%. The BRC described it as the highest rate in two and a half years. In September the index had edged lower, to 1.4% from 1.5% in August, so the October move represents a sharp reversal rather than a continuation of a gentle trend.

Food inflation rose to 2.9% from 2.5%. Within food, the split matters: fresh food inflation was unchanged at 2.6%, while ambient food (the long-life products on the middle aisles of a supermarket) rose a full percentage point to 3.2%. Non-food inflation, which covers clothing, footwear, furniture, electricals, health and beauty, and household goods, more than doubled from 0.8% to 1.7%.

Category	October 2026	September 2026	August 2026	3-month average (to October)
All shop prices	2.1%	1.4%	1.5%	1.6%
Food	2.9%	2.5%	2.8%	2.7%
Fresh food	2.6%	2.6%	3.0%	2.7%
Ambient food	3.2%	2.2%	2.5%	2.6%
Non-food	1.7%	0.8%	0.9%	1.1%

Source: BRC-NIQ Shop Price Monitor releases for September and October 2026. All figures are year-on-year changes.

Why the ambient aisle moved first

Ambient groceries are the products that sit on shelves for months: tinned beans and tomatoes, pasta, rice, cereals, sauces, jams, biscuits, coffee and tea. They are packaged, transported and stored using a great deal of energy, plastic, glass and metal, so they tend to absorb increases in energy and packaging costs more directly than a punnet of strawberries.

Dickinson said food inflation “rose again, driven by ambient groceries”, and the Guardian reported her saying supermarkets could no longer keep the prices of tins and packets from going up. Fresh food, by contrast, held at 2.6% as supermarkets continued to compete hard on meat, dairy and produce, the categories shoppers notice first when they compare baskets.

Why non-food doubled

The BRC said non-food inflation “climbed to an almost three-year peak as high energy and transport costs pushed up prices with furniture, flooring and DIY particularly affected this month”. These are bulky goods with long, fuel-intensive supply chains, and they are often sold through large-format stores with heavy energy bills.

The non-food rise is also notable because the category had been close to flat for most of 2026. In September the BRC said strong discounting had reduced the cost of back-to-school essentials, including books, stationery, footwear and electricals. That discounting window has now closed, and the pre-Christmas promotional season has not yet fully opened.

Why are UK shop prices rising now?

The short answer is that retailers say they have run out of room to absorb costs. The longer answer involves three pressures arriving at once: energy and fuel, government-set business costs, and weak but nervous consumer demand.

On energy, the Guardian reported that Brent crude reached USD 117 a barrel in recent days (about GBP 90 a barrel at current rates of roughly USD 1.30 to the pound), well above the roughly USD 70 average in the months before the United States and Israel attacked Iran in February. Gas prices have also risen sharply. Petrol is above £1.75 a litre in many places and diesel is often above £2, according to research cited by the Guardian.

NIQ’s Mike Watkins said that “with global supply chain pressures building over the last 6 months, higher inflation across retail was to be expected”. He added that “price cuts by food retailers since the end of summer has delayed some of the impact”, which is a polite way of saying the supermarkets held the line for as long as they could.

The cost list retailers keep repeating

In its October release the BRC named four costs it says retailers “cannot endlessly swallow”: higher business rates, employment costs, energy bills and packaging taxes. Each has risen over the past two years, and the trade body argues they now land on shelf prices.

The BRC has said separately that the government has “ratcheted up retail’s tax bill by 20% in the last two years”. In a joint analysis with UKHospitality published before the Budget, it estimated that retailers pay the equivalent of 72p in business taxes for every £1 of pre-tax profit, against an average of 50p across eleven main sectors of the economy and 40.5p in banking. These are the trade body’s own calculations and the government has not endorsed them.

The jobs and empty-shop backdrop

The same BRC analysis said retail lost 122,000 jobs in two years after the 2024 Budget increased employer National Insurance contributions, while employment in hospitality fell by 93,000. It said one in seven high street properties across the country now lies empty. For readers who follow local town centres, that backdrop matters as much as the inflation figure itself, because the stores most exposed to rising costs are often the independent and mid-sized shops on the high street.

How does the BRC figure compare with official inflation?

Shoppers will see two different inflation numbers in the news this week, and they measure different things. The BRC-NIQ Shop Price Monitor tracks prices of goods sold in shops. The Consumer Prices Index (CPI), published by the Office for National Statistics, covers the whole household budget, including energy, fuel, rent, transport and services.

The ONS reported last week that headline CPI inflation rose to 3.5% in September, and the BRC noted that CPI food inflation held at 1.3%. That food figure is noticeably lower than the BRC’s 2.9% for October, partly because the two indices use different baskets, weights and collection periods, and partly because the BRC reading is a month more recent.

Measure	Published by	Latest reading	What it covers	Next release
Shop Price Monitor (all items)	BRC with NIQ	2.1% (October)	Food and non-food goods on retailers’ shelves	Late November, for November
Shop Price Monitor (food)	BRC with NIQ	2.9% (October)	Fresh and ambient groceries	Late November
CPI (headline)	ONS	3.5% (September)	Whole household basket, including energy, fuel and services	November, for October
CPI food and non-alcoholic drinks	ONS	1.3% (September)	Food and drink within the CPI basket	November, for October

The BRC’s lead economist Harvir Dhillon said last week that the lifting of the Ofgem energy price cap in October “will push up October’s figure when published in November”. In other words, the next CPI reading is also expected to show pressure, and the shop price data released today is an early signal that goods prices are joining in.

Why the September CPI figure matters for shops

The September CPI rate is the figure used to uprate business rates the following April. Dhillon said the September reading meant retailers were “on the line for around £250 million in additional bills” from April 2027 unless the Chancellor acts. The BRC wants the business rates multiplier frozen rather than allowed to rise by 3.5%.

How reliable is the BRC shop price data?

The BRC-NIQ Shop Price Monitor has been published for many years and is widely reported by the BBC, the Guardian and the trade press. It is compiled using NIQ data on prices at participating retailers, and it is one of the earliest monthly readings of retail price trends in the UK.

Two caveats are worth keeping in mind. First, the BRC is a trade body representing retailers, and it publishes the data alongside policy demands. The numbers are produced with an independent data partner, but the commentary is advocacy. Second, the index measures shop prices only, not services, energy or rent, so it is not a substitute for the ONS CPI measure that the Bank of England targets.

With those caveats, the October reading is still significant because it marks a change in direction across both food and non-food at the same time, and because it arrives the day before a Budget that both retailers and the government have framed around the cost of living.

What does this mean for your weekly shop?

An inflation rate of 2.1% does not mean every product costs 2.1% more. It is an average, and the October data shows a widening gap between categories. Fresh food is rising more slowly than tins and packets, and furniture and DIY are rising faster than clothing, which the ONS said last week had been held back by unseasonably warm weather.

For a household spending £100 a week on groceries, food inflation of 2.9% would add roughly £2.90 a week, or about £150 over a year, if the rate held and the basket stayed the same. That is an illustration rather than a forecast, and many shoppers will offset part of it by switching brands, stores or pack sizes.

The pressure is most visible among lower-income households. The Guardian reported findings from Changing Realities, a project led by Professor Ruth Patrick of the University of Glasgow that follows 100 low-income families. In the last month, 73% of participants had shopped in the reduced-items aisle, 62% had changed the food they buy and 63% had left the heating off even when cold.

Practical steps that still work

The October data suggests some simple tactics are worth more now than they were in the summer:

• Compare unit prices on ambient goods (the price per 100g or per litre on the shelf label), since this is where inflation is fastest.
• Stock up on long-life staples during genuine multibuy promotions rather than at full price.
• Look at discounter and own-label ranges for tins, jars and dry goods, where the price gap with branded products tends to be largest.
• Delay large furniture, flooring and DIY purchases until the Black Friday and January sales if you can, as these categories are rising fastest.
• Check loyalty-card pricing carefully: a “member price” is only a saving if the shelf price has not been raised to create it.

The BRC said retailers “still delivered plenty of promotions on sweet treats ahead of Halloween”, which matches what families told researchers about the season. Our earlier report on how families are cutting costs on UK Halloween spending found most households planning to spend little, even as forecasters expected the overall market to grow.

What is the BRC asking the Chancellor to do in the Budget?

The BRC framed today’s release as a direct message to Healey. “The message to the Chancellor ahead of tomorrow’s Budget could not be clearer: act now or prices will keep on rising,” Dickinson said.

She set out what she called a simple recipe: “Slash employment costs. Cancel the 3.5% business rates increase. Remove shops from the high-value surtax. Otherwise, households will end up paying the price.” The “high-value surtax” refers to the higher business rates multiplier that applies to the most valuable properties in England, which includes large supermarkets, retail parks and department stores.

The three asks in detail

1. Employment costs. Retailers want relief on employer National Insurance contributions. The BRC has separately called for the threshold at which employers start paying NICs to be raised, arguing this would help entry-level and part-time jobs.
2. Business rates. The BRC wants the multiplier frozen for 2027–2028 instead of rising in line with September CPI. It puts the cost to retailers of the planned rise at around £250 million.
3. Higher multiplier for large stores. The BRC and UKHospitality want high street retail and hospitality removed from the higher multiplier, arguing large shops already pay a disproportionate share of the total rates bill.

None of these measures has been confirmed by the Treasury. The Budget is expected to include a range of tax changes affecting retailers, so the detail will only be clear once the Chancellor sits down on Wednesday.

The marketplace VAT question

One of the most significant expected changes for online retail is not about shop prices at all. Healey is widely reported to be preparing to make large online marketplaces collect VAT on behalf of UK-based business sellers. We covered the details in our report on plans for Amazon and eBay to collect sellers’ VAT in the Budget, which high street retailers have long argued would level the playing field with online sellers who under-declare.

What has the government already announced before the Budget?

On Monday evening, the Treasury published a package it called “everyday fixes”, which it said would provide “breathing space” for households. Several of the measures touch on shopping directly.

The most relevant is the removal of import tariffs on more than 100 products, which the government described as “family favourites including baked beans, chocolate and gherkins”. The BBC reported that marmalade, for example, will see a 20% tariff, plus an additional £19 charge per 100kg imported, suspended. The government said that, together with tariff suspensions already in place on products including pasta, fruit juice and tuna, households could save up to £21 a year on their food shop.

Healey said: “Conflict in the Middle East and Europe is hitting families here at home through higher everyday costs. We can’t control global events, but we can act where we can make a difference.” The Conservatives were dismissive. Shadow chancellor Andrew Griffith told the BBC: “Shoppers face rising costs at the till and families are struggling to make ends meet, but Burnham’s plan is cheaper gherkins.”

Other measures that affect shoppers

• Post Office drop boxes: hundreds more will be installed, bringing the total to 1,000, so people can send and return parcels without queuing at a counter in the run-up to Christmas. The government also promised upgrades to 600 Post Office branches by the end of the financial year.
• Fuel duty: the BBC understands fuel duty will be frozen again in the Budget, and The Sun first reported that the 5p duty discount will continue.
• Mileage rates: the 55p per mile tax-free rate for the first 10,000 business miles becomes permanent, and the rate above 10,000 miles rises from 25p to 35p.

Issue	What the BRC wants	What the government has said so far
Food import costs	Not a headline BRC ask	Tariffs removed on 100+ products; up to £21 a year saving claimed
Business rates rise in April 2027	Cancel the 3.5% increase	No announcement before the Budget
Higher multiplier for large shops	Remove shops from it	No announcement before the Budget
Employment costs	Cut employer NICs, raise threshold	No announcement before the Budget
Fuel and transport costs	Lower energy and transport costs for retailers	Fuel duty freeze and 5p cut expected, per the BBC
Parcel returns	Not a BRC ask	Post Office drop boxes to reach 1,000

The comparison shows the gap between the two sides. The government’s measures so far reduce specific costs for households; the BRC’s demands reduce costs for retailers, on the argument that savings would flow through to shelf prices. Whether the Budget bridges that gap is the question retailers will be watching on Wednesday.

Will prices keep rising into Christmas?

The BRC’s own wording points that way. Dickinson said: “Without a change of course, October’s jump in inflation is only the beginning.” Watkins at NIQ said high street retailers, “faced with consumers becoming more cautious in the face of higher energy and fuel costs, will now be more reliant on promotions to drive discretionary non-food spend”.

That combination suggests a familiar festive pattern: higher underlying prices on essentials, with heavy discounting on gifts, clothing and electricals around Black Friday on 27 November. Shoppers should expect to see both at once, which makes price comparison more important than usual.

Interest rates and borrowing

The Guardian reported that Bank of England officials are expected to raise interest rates next week from 3.75% to 4%. If retail price rises persist, it said, more members of the Monetary Policy Committee could be persuaded to raise rates again in December or the new year. Higher rates feed into credit card, mortgage and buy now, pay later costs, which matters for shoppers who spread big Christmas purchases.

Confidence is weak, but spending intentions rose

Separate BRC-Opinium data published on 22 October showed consumer expectations for the state of the economy over the next three months fell to −40 from −34, and expectations for personal finances fell to −18 from −15, which the BRC said was the second-lowest level on record. Yet expected spending on retail rose to +15 from +5, as the festive period entered the three-month window. Dickinson said concerns about inflation “may also be contributing” to that rise, meaning people expect to spend more partly because things will cost more.

Actual spending has already softened. The ONS reported that retail sales volumes fell 0.4% in September, with clothing hit by warm weather. Our analysis of how UK retail sales fell 0.4% in September as online slipped before Black Friday sets out the detail behind that figure.

Which retailers are under most pressure?

The October data points to two groups. The first is the large grocers, who have been absorbing ambient cost increases and now appear to be passing some through. The second is non-food specialists in furniture, flooring and DIY, where the BRC said the rise was concentrated this month.

For the supermarkets, the competitive landscape is also shifting. The Competition and Markets Authority recently brought Aldi and Lidl within the rules for large grocers, a move covered in our report on how the CMA designated Aldi and Lidl as large grocery retailers. The discounters’ growth is one reason the big four have fought so hard to hold fresh food prices, even while ambient prices rise.

Value chains and the high street

Discount and variety chains sit at the sharp end of both trends: their customers are the most price-sensitive, and their margins are thin. The sale process at Poundland, which we covered in our report on what the Poundland sale means for its shops and shoppers, shows how quickly cost pressure can turn into questions about store estates.

Independent shops face the same costs without the buying power. They pay business rates, energy bills and wages, but they cannot spread rises across thousands of product lines or negotiate national supplier deals. For them, a rates freeze or a lower multiplier would make a larger proportional difference than for a national chain.

Online retailers

Online retailers are not immune. Delivery costs rise with diesel prices, and packaging taxes apply to boxes and fillers as well as shelf packs. The difference is that online sellers have more room to adjust delivery thresholds, minimum basket values and returns fees, which shoppers may notice before they notice a change in product prices.

What should shoppers and small retailers watch next?

The next few weeks bring a cluster of dates that will show whether October’s jump is a blip or the start of a trend.

• Wednesday 28 October: the Budget, where retailers will look for decisions on business rates, employment costs and marketplace VAT.
• Next week: the Bank of England’s interest rate decision, with a rise to 4% widely expected according to the Guardian.
• Mid-November: ONS CPI for October, which the BRC expects to reflect the higher Ofgem price cap.
• 27 November: Black Friday, when discounting will show how far retailers can still cut prices to win demand.
• Late November: the BRC-NIQ Shop Price Monitor for November.

For small retailers, the immediate practical issue is how to handle supplier price increases into the Christmas period without losing footfall. For shoppers, it is how to buy essentials before prices move further while waiting for genuine discounts on larger items.

Frequently asked questions

What is the UK shop price inflation rate for October 2026?

The BRC-NIQ Shop Price Monitor put shop price inflation at 2.1% year on year in October 2026, up from 1.4% in September. The BRC said it was the highest level in two and a half years.

How much has food inflation risen in UK shops?

Food inflation in the BRC index rose to 2.9% in October from 2.5% in September. Ambient food rose to 3.2% from 2.2%, while fresh food was unchanged at 2.6%.

Which products are rising fastest in price?

The BRC said ambient groceries such as tins, jars and packets drove the food increase, while furniture, flooring and DIY were particularly affected in non-food. Non-food inflation reached an almost three-year peak of 1.7%.

Why is the BRC figure different from CPI inflation?

The BRC index covers only goods sold in shops, while ONS CPI covers the whole household basket, including energy, fuel and services. CPI was 3.5% in September, with CPI food inflation at 1.3%; the two use different baskets and collection periods.

Will the Budget make food cheaper?

The government has already said it will remove import tariffs on more than 100 products, including baked beans, chocolate and gherkins, and claims households could save up to £21 a year combined with existing suspensions. Retailers argue that cutting business rates and employment costs would have a larger effect on shelf prices.

What is the business rates increase the BRC wants cancelled?

Business rates are uprated each April in line with the previous September’s CPI. The BRC says the 3.5% rise due in April 2027 would add around £250 million to retailers’ bills, and it wants the multiplier frozen.

Will prices rise further before Christmas?

The BRC warned that October’s jump “is only the beginning” without a change in policy, and NIQ expects retailers to rely more on promotions for non-food. Shoppers should expect higher underlying prices on essentials alongside heavy discounting around Black Friday on 27 November.

When is the next BRC shop price index published?

The BRC-NIQ Shop Price Monitor is published monthly, usually in the last week of the month. The November reading is due in late November 2026.